Calls For Change As Weinberger Trial Highlights Brokers' 'Racist' And 'Sexist' Behaviour

The broking industry is not renowned for being a politically correct environment. A recent race discrimination case brought by Laurent Weinberger against former employers Tullet & Tokyo Liberty (FX Week February 5) only highlighted ongoing concerns in the industry about racist and sexist "horseplay" on the trading floor. But massive consolidation in the broking industry is changing the make-up of the industry.

Spot FX broking has declined in the last five years due to the rise of electronic broking systems such as EBS and Reuters' Dealing Systems. The lack of new entrants in the industry in that timeframe has meant a stagnation of the make-up of brokers in spot FX. And since the last major influx of brokers in spot FX was about five years ago, says an analyst in London, the make-up of these brokers -- largely white and male -- has not changed.

But due to changes elsewhere in the industry, this image is no longer representative of the wider FX broking arena. FX broking does have growth areas -- notably in areas not covered by electronic systems. Emerging markets broking in currency pairs not listed on the EBS system, for example, is still actively voice-brokered. There has also been increased broking of FX forwards. In these areas, an increase in new broking recruits has brought a more diverse range of people into the market.

The last five years has also seen a change in the background of entrants in the broking industry. A trend towards taking more graduates, rather than school-leavers, has reduced some "unacceptable" behaviour in the trading room.

A London-based recruiter says that during the Asian and Russian financial crises in 1998, many brokerages lost a lot of money. Re-evaluation of these areas resulted in the hires of more local specialists with more detailed country knowledge. This, more than any other development over the last few years, has been responsible for changing the composition of the trading rooms, says the recruiter.

Representatives from the major broking firms say that they have undertaken rigorous training programmes for managers, making them aware of their responsibilities under all anti-discrimination acts. It is the responsibility of every manager for the conduct of their sections.

Bruce Collins, London-based chief executive officer of Tullet & Tokyo Liberty, says that in the aftermath of the Weinberger case it brought an employment law specialist in to review its policies for any complaints, and that these were deemed to be very satisfactory. "It is impossible to police everybody 24 hours a day, and sometimes it is only possible to react when a complaint has been made" he says, adding: "In light of this [Weinberger] case we will become even more proactive in our anti-discrimination policies, and will not tolerate any behaviour like this in the future."

A representative from another broking firm in London says all broking companies have tried to make sure that the exuberance of any one individual doesn't hurt others.

Society at large is not willing to accept this behaviour and this has filtered through to the trading rooms, he says. He agreed that the increasing participation of females and ethnic minorities has made some of the practices that existed in the trading rooms in the eighties and early- to mid-nineties no longer acceptable.

A New York-based recruiter says the more litigious environment in the US made broking houses review their working practices much earlier than the UK.