A veteran financial advisor with one of the largest wealth managers alleges it’s the firm’s fault that white representatives “exclude and/or exploit minorities” when advisors join together in teams.
Mohamed Shoukr lost all but a fraction of his book of business with Wells Fargo Advisors due to a discriminatory partnership between Shoukr, who is Egyptian American, and Zachary Karr, a white advisor who made racist remarks and poached many of his clients, Shoukr claims in a lawsuit filed May 18 in Washington, D.C. federal court. Shoukr’s managers retaliated against him with “demeaning and intimidating behavior” when he reported the problems, the lawsuit alleges.
The filing comes two months after Edward Jones agreed
“Unfortunately, Wells Fargo allows its white FAs to exclude and/or exploit minorities through teams and partnerships,” Shoukr’s lawsuit states. “Often, minorities at Wells Fargo are shut out fully from teaming opportunities to their distinct disadvantage under Wells Fargo’s policies and practices. But even when successful minority FAs like Shoukr are permitted to join teams, the firm allows FAs and managers to use those same teams and partnerships as a subterfuge to transfer ownership of assets from minority FAs to white FAs.”
San Francisco-based Wells Fargo, which has more than 13,000 advisors, says it has reviewed Shoukr’s filing. About 45% of the firm’s U.S. workforce is Black, Latino or other minorities and 55% of its global staff is women,
The firm “denies the claims in Mr. Shoukr’s lawsuit, including any claims of discrimination,” spokeswoman Jackie Knolhoff said in an emailed statement. “Wells Fargo provides equal employment opportunities and is committed to providing our employees with an inclusive and respectful workplace where talent flourishes.”
Karr, who moved to Stifel last year, didn’t respond to requests for comment on the lawsuit.
Karr “wanted to use the teaming arrangement to misappropriate the book of business Shoukr had spent his career developing,” according to the filing, which also says that Karr remarked that “all foreigners are Mexicans to me” and mocked Shoukr as an “Arab driving a Range Rover.”
Shoukr has managed up to $100 million in client assets during his 20-year tenure with Wells Fargo and firms that were later acquired by the bank, A.G. Edwards & Sons and Wachovia, the lawsuit states. He’s an immigrant who came to the U.S. as an adult after growing up in Egypt. Karr and Shoukr joined their practices together in a Washington, D.C.-area branch.
Their managers pressured Shoukr to reduce the amount of production credit he received from the team in Karr’s favor and “relinquish valuable client accounts, resources and business opportunities in favor of white FAs,” according to the lawsuit. The managers repeatedly berated Shoukr in an effort, he alleges, to force him into an unfavorable split even though he had built up his own book and excelled more than Karr at finding new clients. Shoukr’s complaints brought only a “sham investigation” and “baseless writeups,” according to the lawsuit.
When Karr went to Stifel last year, Shoukr didn’t receive any assistance from the firm in attempting to keep his clients, the lawsuit says.
“Wells Fargo's refusal to address Karr's poaching and otherwise defend Shoukr is inconsistent with what the firm did for white FAs in the same position and in retaliation for Shoukr's complaints,” the filing states. “The discrimination that Shoukr faced during his tenure has destroyed his career and interrupted the development, success and overall compensation that he would have enjoyed had he been allowed to work in an environment free of such discrimination and retaliation.”
The four-count lawsuit alleges two violations each of laws relating to discrimination and retaliation. The summons gives Wells Fargo three weeks to respond. An attorney from the same firm that represented the former Edward Jones advisors, Stowell & Friedman, is representing Shoukr in the lawsuit. He’s still registered with Wells Fargo, with a company website
