Legal battle as US firm grows fast

AN American financial services giant is facing a string of employment tribunals in Britain, where it has staged an aggressive expansion programme.

The complaints, by four employees, range from racism and victimisation to constructive dismissal. The legal challenges are another blow for Edward Jones, the company that has been dubbed the Wal-Mart of Wall Street.

Its directors in Britain have been fined by a pensions watchdog. In America, the parent is involved in a Securities & Exchange Commission inquiry and has been targeted in a class-action legal case.

The 133-year-old firm opened in Britain in 1997 and now has 285 staff, 80 branches and a head office in London's Canary Wharf. It offers stockbroking and financial advice by selling door-to-door and through personal contacts.

In America, it grew by focusing on small, rural communities, an approach that led Fortune magazine to give it the Wal-Mart of Wall Street tag.

The company has a network of more than 8,500 offices in America and Canada and has been voted one of the best companies to work for in America. Some employees suggest this is not the case in Britain, where it made a loss of £20.4m last year.

The argument is that its hunger to build business has put some staff under too much pressure.

One former investment representative, Samuel Jacobs, 34, of Croydon, Surrey, is taking the firm to an employment tribunal claiming more than £150,000. His allegations include race discrimination and constructive dismissal, claims vigorously denied by the company.

Tim Kirley, who heads Jones in Britain, said: 'We can't comment on active legal matters.'

Kirley was a trustee of the Edward Jones (UK) Pension Plan and was fined in 2001 by the Occupational Pensions Regulatory Authority as one of the trustees who failed to appoint an auditor or obtain an auditor's statement.

In America, the firm faces regulatory action by the SEC as part of the US watchdog's inquiry into revenue-sharing arrangements.

Under these, financial product suppliers pay firms that promote their products. While the practice is not illegal, suppliers must tell clients about the arrangements.

In Jones's case, they include deals with Lord Abbett, a US fund supplier selling in Britain partly through the Jones network.

Revenue-sharing in America has also led to Jones being named in a class-action lawsuit by customers who bought funds that failed to disclose they were paying the firm to promote them.