£1m banker's sexism claim

A woman banker who earned £1million a year is suing her former employers for sex discrimination.

Stephanie Villalba, 42, one of the UK's top investment bankers when she was made redundant by Merrill Lynch, is the most senior woman to sue a City firm for alleged sex bias.

Until she left last year, the American had enjoyed an unbroken 17-year career with Merrill Lynch and in May 2002 was entrusted with investing funds for its most important clients in mainland Europe.

Three months later she was promoted in a shake-up at the firm and added the funds of the UK and Ireland's super-rich to her empire.

She was in such demand that potential clients would only be considered if they had more than £500,000 to invest.

As one of the City's top executives she enjoyed a pay package in excess of £1million a year and lives in a £4.5 million five-storey Georgian home in Belgravia.

But last August she was told she had no future at the company and was made redundant. In response she launched a claim of unfair dismissal, sexual discrimination and unequal pay against Merrill Lynch Europe, Merrill Lynch & Co and Merrill Lynch International.

Ms Villalba is also demanding, in a separate case in the High Court, that Merrill Lynch hand over emails, notes and other personal data it has stored about her. Pending a ruling in that hearing, which could have consequences for other employees suing their bosses, the tribunal is due to open next month.

A City source from a rival firm said: "Stephanie is determined Merrill should not be allowed to get away with the way they treated her.

"As far as she is concerned she was doing a very good job for less money than those heading up other divisions and yet they decided they would let her go. The company has pulled off a bit of a flanker by appointing another woman as her successor and the last quarterly results from that division of Merrill were up by some 30 per cent. If Stephanie goes down she will want to go down fighting."

The case could prove an embarrassment for Merrill, with a raft of senior bankers understood to be on standby to fly in from the bank's New York headquarters.

They face being put on the spot at the tribunal about how pay is set. Those who could be called include Ms Villalba's immediate superior, managing director Phil Sieg, and his boss Raymundo Yu. Others are Ausaf Abbas, former head of Merrill's private banking in Asia Pacific, and Kelly Martin, former president of the IPC group and now chief executive of Irish drugs company Elan.

Last week the bank settled a 10-year battle with 1,000 of its women brokers in America who sold credit cards and other products. They claimed the bank had a culture of bias against women. A panel of arbitrators ordered Merrill to pay one banker, Hydie Sumner, £1.2 million compensation.

A spokesman for Merrill said: "We are unable to talk about the details of the case but are very keen to point out that we do not condone gender discrimination in any way." A spokesman for Ms Villalba's solicitors said they could not comment on the case.