The lawsuit's co-lead counsel, Cyrus Mehri estimates that, in addition to the $46 million, the policy-and-procedural changes will increase the earnings of female financial advisors by at least $16 million over five years and the diversity efforts by the Company over five years will cost an additional $7.5 million.  

Mehri and his team interviewed more than 200 female financial advisers in 35 states and "the momentum behind the investigation became a powerful engine for meaningful change," said Steven Sprenger, co-lead counsel, in a prepared statement.

Morgan Stanley's head of its GWMG office of diversity, Caroline Gundeck, responded to the settlement in a statement saying the company is committed to initiatives that attract and retain women financial advisor, "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." 

The current lawsuit marks the second time in three years that Morgan Stanley has decided to settle a gender-discrimination lawsuit. The company agreed in 2004 to pay $54 million to settle similar claims brought by female employees who worked in the firm's global wealth management group (GWMG).

"Promotion and pay issues [with female employees] are problems indicative of the financial industry ... this industry continues to go through a period of a lot of change and a lot of resistance to change," said Elizabeth Grossman, regional attorney, New York District Office for the EEOC.

Grossman, who was the lead attorney in the EEOC's prosecution of the lawsuit settled in 2004, said Morgan Stanley also agreed to a consent decree when it settled the $54 million case. The consent decree put in place policies and procedures designed to ensure equitable treatment along gender. Some of those policies were only focused on changing practices in the institutional equity division and would not have covered the GWMG, which is the subject of the $46 million settlement.

 

"There's a lot of work to be done in this industry as in every historically dominated industry because there is so much cultural baggage in a male-dominated industry," said Grossman.

 

Mehri said he expects Morgan Stanley's settlement to motivate financial institutions to become more inclusive of female executives.

 

"Most importantly, we anticipate that this settlement will have an enduring impact on the way America's financial institutions treat female financial advisors," Mehri said. "Morgan Stanley deserves credit for working with us in a collaborative, proactive way over the two years of negotiations."

 

 

 

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