Smith Barney has agreed to pay $98 million to settle claims made by class action lawyers, including one who is almost freakishly devoted to Star Wars, on behalf of thousands of current and former brokers that they are owed overtime pay and other reimbursements.
The proposed settlement is the latest and largest by securities firms that contend brokers are exempt from state and federal overtime laws because they are salaried, administrative employees. The brokers' draw on commissions, a monthly loan most receive, qualifies as a salary, they [the class action lawyers] argued...
In February, the UBS Wealth Management unit of UBS AG agreed to pay $89 million in a nationwide settlement to financial advisers who sued for overtime pay and to recover charges assessed by the firm for sales assistants, computers, and trading errors.
Last year, Morgan Stanley agreed to pay $42.5 million, and Merrill Lynch & Co. Inc. acceded to pay $37 million, to settle claims involving only California brokers. Additional claims against the firms are pending in Connecticut, New York and New Jersey.
More settlements are expected. Too bad the story has no direct quotes from Mark "Obi Wan" Thierman. We're sure that at some point Thierman must have greeted news of the settlement by saying "You were right, Master. The negotiations were short."
Smith Barney to pay $98 million [Philadelphia Inquirer]