Morgan Stanley's Global Wealth Management Group has settled a class-action lawsuit that alleged it discriminated against women brokers and trainees in promotion and compensation.
Under the settlement, the group will adopt new programs in account redistribution, training and management development, and other areas to enhance the success of women financial advisors. The settlement also establishes a process through which women advisors may submit monetary claims if they believe they were disadvantaged because of their sex. A $46 million pool has been established to pay for the claims.
Sources told The Wall Street Journal they expect Morgan Stanley to spend about $7.5 million on training over the next five years, and that the pay of female brokers should rise by about $16 million.
The June 2006 lawsuit claimed Morgan Stanley executives assigned the most lucrative brokerage accounts and leads to male brokers, and discriminated against women in training, mentoring, partnership assignments and allocating promotions. In 2004, Morgan Stanley paid some $54 million to settle charges it denied women pay raises and promotions, paid them less than men, excluded them from company events and subjected them to lewd behavior.
"We are firmly committed to the initiatives we will be undertaking to attract and retain women financial advisors and help them be as successful as possible, and pleased to resolve a legal matter stemming from the past. Our goal - across the organization - is to be the employer-of-choice for talented women," said Caroline Gundeck, head of the GWMG's Office of Diversity.
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