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Harassing Hiegel.

Super-Broker Frank Hiegel Fired For Sexual Harassment, On Cutting Edge Of Corporate Lawsuits For The 1990s

Stockbroker Frank Hiegel, 46, says he was victimized in June by the mother of all kangaroo courts when he got the ax as Little Rock branch manager of Prudential Securities Inc.

In Hiegel's version, he was an innocent man framed by unknown accusers who charged he had sexually harassed them.

He doesn't know their names or what they say he did to them.

He only knows they cost him a lucrative job.

Hiegel says his detractors were given credence in the supercharged legal climate of sexual harassment lawsuits in the 1990s.

Prudential takes a different view.

Sources at the national and local level of Prudential say allegations were made that Hiegel sexually harassed numerous women over the last two years, but it took one particular office incident to bring the others to the surface.

In May, Prudential headquarters suddenly received letters and calls from 11 female employees who alleged sexual harassment by Hiegel, sources say.

Shortly afterward, two attorneys from the firm came to Little Rock and spent more than a week interviewing female employees - even those who had not complained.

Company insiders say the attorneys found no "horror stories," but uncovered enough information in the interviews to establish a clear pattern of sexual harassment from Prudential's point of view.

Whether you believe Hiegel or Prudential sources, the fact is a stockbroker making hundreds of thousands of dollars a year got the boot for allegations of sexual harassment.

Hiegel is not alone.

In a recent Business Week/Harris Poll, 27 percent of 400 female executives said they had been subjected to sexual harassment.

Of those women, fully 75 percent said they had reported the incident.

Hill-Thomas Kicks It Off

Many observers think sexual harassment lawsuits became fashionable last fall when the Anita Hill-Clarence Thomas controversy transfixed the nation.

Updated information on sexual harassment complaints is impossible to find, but some numbers are available.

According to the federal Equal Employment Opportunity Commission, about 5,600 charges of sexual harassment were reported to EEOC in 1990, up from about 4,400 in 1986.

Only 50 sexual harassment lawsuits were filed by the EEOC from those complaints, up from 38 in 1986.

It is worth noting that prior to 1985, the EEOC did not even maintain separate statistics on sexual harassment.

But Prudential has been paying attention.

Following the Hill-Thomas hearings, Hardwick Simmons, chairman and chief executive officer of Prudential Securities, issued a memo to employees that reiterated Prudential's sexual harassment policy.

"This type of discrimination, like any form of discrimination, is an abuse that will not be tolerated at The Prudential," Simmons said.

"In eradicating sexual harassment, we need those affected by it to report it responsibly and promptly."

Simmons' memo certainly promised Hiegel's accusers a warm reception at national headquarters.

Simmons' Ivy-League style managers also clashed with Hiegel's brash, southern boy approach.

Hiegel suspects there is another factor lurking behind his dismissal: the scandal surrounding Donald Gates, a former Prudential broker in Little Rock.

In the spring, the City of Elkins, W.Va., accused Gates of conspiring with Elkins City Treasurer Glen Wyland to bilk the city for $1.24 million in speculative investments.

Prudential later paid a $1.52 million structured settlement to Elkins, and left another $492,000 in the city's investment accounts.

As branch manager, Hiegel was responsible.

"Their statement to me is that it's totally unrelated," Hiegel said. "It's a little hard for me to believe."

Telling His Tale

Hiegel emerged from a two-month exile on Aug. 20 to tell his version of the sexual harassment maelstrom that early this summer halted his 10-year career as branch manager.

Recently, Hiegel joined the Shearson Lehman Brothers Inc. office in Little Rock as a broker. The firm invited Arkansas Business for an exclusive interview to clear up the allegations.

Sitting with Hiegel were Shearson Branch Manager David Coates -- a friend of 20 years -- and office spokesman John Barnes.

"I didn't have any problems working with women at all," Hiegel says.

"I'm not and haven't been involved with anyone in that office personally. I have never solicited sexual favors from the sales assistants, from any of the women."

For a decade beginning in 1983, Hiegel built the Prudential branch into a national powerhouse that constantly produced in the top 10 percent of the firm, often out-performing branches in Kansas City, Mo.; Memphis, Tenn.; Tulsa, Okla.; Dallas; and Houston.

At one time, Hiegel's office was No. 1 in the country.

But on June 8, 1992, Hiegel mysteriously disappeared from the radar screen. As the bomb was dropped on him at Prudential's New York headquarters, the locks were being changed at the Little Rock office.

"I can tell you how it happened in short order," Hiegel says.

"I got a phone call that said they had received an allegation from a female employee. That they wanted me to come to New York. I did.

"Previously, there had been a letter that had been written two or three years ago ... an unsigned letter, which, by the way, I never got a copy of. At one point, I think, they read me the letter. It was unspecific and unsigned."

"They had one of their female attorneys talk to a number of women in the office. They instructed me not to talk to them because they didn't want me influencing those people in any fashion."

"They terminated my employment with Prudential Securities."

"Because they feel an obligation, for some reason, to protect the accuser ... the fact is they are unwilling to tell me who called or who wrote ... I don't know who made the allegation. I don't know what it referred to. I have not met my accuser."

Nationally, Prudential was not spared, having been slapped with several harassment suits in late spring.

In the midst of this "climate," Hiegel was just one more scapegoat for Prudential, say Hiegel, Barnes and Coates.

Hiegel's departure could very well cost Prudential some of its top brokers, who may remain loyal to their old boss. With the brokers come the clients.

Among those brokers, it still isn't clear what happened.

The Other Side Of The Story

A Prudential broker who was in the office the day Hiegel was fired said employees were afraid to speak about the incident.

"It was really kind of hushed up," the broker said, "No one would talk overtly about it. You had to get into someone's room and they would tell you what was going on."

The broker wanted to know the names of the women involved. "That's the one thing you couldn't get out of anyone up there," he says. "I think they tried to keep it down. I never knew who complained."

The broker says he had no knowledge of any harassment by Hiegel.

"I never saw Frank do that with anybody when I was around. It was a total shock to me."

Several brokers at Prudential declined to speak on or off the record about Hiegel.

New branch manager Leon Bomar also refused to comment.

Prudential spokesman Bill Ahearn in New York was supportive of the move to cut Hiegel.

"We were made aware of an issue, we dealt with it as quickly and even-handedly as possible and made a decision" says Ahearn.

"What we're really doing is to take care of our people the way they should be taken care of."

Smoke, But No Fire

Hiegel was born to a prominent Conway family and attended St. Joseph High School, a small Catholic school in Conway. He graduated in 1968 with a bachelor's degree in political science from St. Louis University.

In 1969, he went to work for Raney Securities Co. Inc. and T.J. Raney & Sons Inc. The same year he married Mary Raney, a granddaughter of T.J. Raney. The Raney years also fostered a friendship between Hiegel and Coates, a fellow broker.

The family connection was severed in 1982 when Mary's uncle, Tom Raney, gained control of the company and fired Hiegel.

After he was fired a second time, at Prudential, Hiegel took his time in coming to terms with his employment future.

He spent a month relaxing in Hot Springs with "Miss Mary and the boys." Then, Hiegel says, he performed a lengthy "survey" of the industry, determining which firms had a positive outlook for the '90s.

Shearson was one of only two firms represented in Little Rock that he thought would be major players, Hiegel said, so it was a natural choice, without regard to the fact that the shop was run by a close friend.

Coates was quick to point out that Shearson executives at the highest level were involved in the decision, quashing any suspicions he acted out of loyalty to Hiegel.

When Coates and Hiegel parted ways in 1982, Hiegel put out a shingle as Frank S. Hiegel and Co., and also worked for Arkoma Management Co., running into a spot of trouble along the way.

According to the Arkansas Securities Department, Hiegel was fined $1,500 in 1984 for selling interest in the Arkoma private drilling partnership and failing to deposit the receipts in a separate escrow account.

In 1983, he opened a one-man branch office for Prudential. By the time he was through, the office had expanded to include 42 brokers and 21 support-staff members.

Fade The Heat

Shearson seems convinced there is no evidence of sexual misconduct.

So far, none of the Little Rock employees have sued Prudential or Hiegel, leading to speculation that several women have reached out-of-court settlements with the company.

Coates defended his decision in hiring Hiegel and said his office had "investigated" the matter, although he wouldn't disclose the specifics of the inquiry.

"It was not an easy decision to make," Coates says.

"I've got 67 people in this office. They're raising families, they live here, own homes, they send their kids to school. The easiest decision for me to make is don't take the heat.

"For me to sit here and expose these 67 employees to the type of harassment ... you've got to believe that before I made that decision ... we've looked into these complaints."

"From the inquiries we could make, all we could ascertain was that there was a complaint of some kind that did not involve sexual assault in any way. There was no allegation of any kind that Frank had done anything overt."

If Shearson employees are grumbling about Hiegel's arrival, they aren't doing it aloud. No reservations were expressed by three female brokers who spoke with Arkansas Business last week.

"I don't think anybody knows the whole story yet," says one. "Evidently our branch manager knows. I think that to have worked for a company 10 years and to have been fired on the spot ... that says something about the company, not about Frank."

Another broker says "I think people just feel that if he wants a job ... that'll be fine. They don't feel they know what happened over there."

About 25 of Hiegel's employees at Prudential were women, and Hiegel said he got along just fine with most of them.

But when asked to name four women at Prudential who would attest to his character, Hiegel bristled, and Barnes stood up, signifying the interview was over.

"It's improper for me to put those people on the spot," Hiegel said.

Coffee Mug Harassment

The interview produced a few odd office anecdotes about sexual harassment, anecdotes that seem to be accepted as part of the male-oriented business culture.

"I don't mean to get this emotional," Coates said with a tear in his eye. "I had a girl that worked out here, and she was constantly coming to me and saying, 'I can't get along with a broker.' The broker would tell her to go get his coffee -- she found that sexual harassment.

"So I asked the broker not to ask her to go get his coffee. It got to the point where she did not fit well. She caused turmoil. I wanted to get rid of her. If I got rid of her, I know the first thing that would happen is she'd call the 800 line ... claiming that there was sexual harassment or something going on, which there wasn't.

"Fortunately, she got pregnant, and she didn't come back, even though we offered her a job.

"With the Anita Hill thing ... a company that has billions of billions of dollars has to respond to these type of complaints even though it could be a witch hunt."

It is obvious the three men perceive Hiegel's tormentors were on a witch hunt. But they stopped just shy of saying it.

Coates went on: "If you interviewed these 20 women |at Shearson~ and you asked them, 'Is there any sexual harassment at this office ... do men occasionally say something they shouldn't, put their hand on your shoulder?' ... I guarantee you 25 percent will have found something that happened."

Although it seems high, Coates' 25 percent estimate is in line with the previously mentioned Business Week poll.

Barnes offered his own take on harassment.

"In a court of law, the only thing that is allowed as admissible evidence is what can be proven as fact," he said. "This is a similar situation. You could probably go back for 10 years and draw up all kinds of sexual harassment allegations."

"There are four or five women in this office who are dear friends of mine that I'll walk behind them sometimes and I'll rub them around the back of the neck, and they love it, but if one of them decides tomorrow that they are mad at me...."

Barnes did not finish the thought.

For his part, Hiegel did not participate in these hypothetical scenarios. He was quiet through much of the discussion, obviously uncomfortable with the subject matter.

After telling his story, Hiegel relaxed and spoke softly in the summer sun.

He's a salesman again, not a manager. Perhaps the pressure is off, and he can rebuild his amazing success story.

"I'm trying to work on through this and take care of my business," he says. "I have a wife that I'm very fond of."

"This has not been a lot of fun."
COPYRIGHT 1992 Journal Publishing, Inc.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:ex-branch manager of Prudential Securities Inc. Frank Hiegel fired for sexual harrassment
Author:Haman, John
Publication:Arkansas Business
Date:Aug 31, 1992
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