Two ugly facets of our industry's culture - gender discrimination and age discrimination - are alleged in a lawsuit brought by two former vice presidents at AIG Financial Products.
That's AIG's infamous derivatives business - the world's best-known poster boy for financial innovation gone wrong. The suit filed this week slaps on another unenviable image: "boys' club." Bloomberg News reports:
Susan Potter, 56, alleged that Joseph Cassano, the former head of AIG Financial Products, said he prefers young workers with 'curb appeal' to those who look like his aunt. A managing director appointed to handle sexual harassment complaints said AIG should replace some staff with young and attractive workers...
Potter and Deonna Taylor, 62, said managers misled them about salary caps, paid younger and male employees more for similar work and fired them in retaliation for filing discrimination charges.
Cassano's name is a familiar one to followers of AIG's travails. He ran the derivatives unit until March 2008, and is widely blamed for hundreds of billions of dollars of unhedged trades that blew up, resulting in a taxpayer bailout. His lawyer responded to the suit by saying Cassano treated staff fairly. The company also denies it discriminated or retaliated against the two women.
The complaint says Cassano "generally promoted a 'boys club' atmosphere and frequently made discriminatory statements about the staff," according to Bloomberg.
AIG Swaps Unit 'Boys Club' Punished Women, Ex-Workers Claim
Bonus Blowback Bypasses Brokers [WSJ]
Do Firms Sue When They Are Afraid to Compete? [Investment News]
Royal Bank of Scotland Increases Bonus Pool for 2009 Despite Loss [NY Times]
Still, the government-controlled bank's investment banking division allocated just 27 percent of revenue for compensation - smaller than the historically low 30-40 percent range reported by U.S. bulge brackets.
Morgan Stanley Chairman John Mack disappointed by decisions from the Obama administration [CEOWorld Magazine]
Ignore the Reuters story with similar headline. The two reporters and three editors Reuters put on this story completely missed the point.
Barclays Wealth keeps Hiring, Snags Team From Neuberger Berman [Investment News]