Discrimination on Wall St.? The Numbers Tell the Story

N.Y. Times
July 14, 2004

During several years of drawn-out litigation over how they treat the women they employ, Wall Street firms have adamantly disputed all contentions that they discriminate — until the time has come to do the math.

In a sex discrimination lawsuit that Morgan Stanley settled on Monday, as in those that Merrill Lynch and Smith Barney settled in the late 1990’s, executives decided not to go public with their track records of hiring, paying and promoting women. In each case, labor lawyers said, the numbers painted a picture that would have been hard to defend.

They show that a few years into the 21st century, Wall Street is still dominated by the white men who fill the bulk of the most powerful and highest-paying jobs in the industry. Data from the Equal Employment Opportunity Commission show that men made up more than two-thirds of the officials and managers in the securities industry in 2002, even higher than the ratio in other industries.

The industry’s own numbers look more lopsided. The Securities Industry Association says that more than half of all employees in the securities industry are white men, but more important, white men fill about four out of five executive management positions and make up more than 70 percent of investment bankers, traders and brokers.

Supported by figures like those, Elizabeth Grossman who was the commission’s lead trial lawyer in the Morgan Stanley case, was comfortable predicting that more complaints of sexual and racial discrimination on Wall Street will surface now that Morgan Stanley has agreed to pay $54 million to settle the commission’s suit.

The case stemmed from the 1998 complaint by a bond saleswoman, Allison K. Schieffelin, who contended that she was denied a promotion because of her sex. The firm countered that Ms. Schieffelin, who will receive at least $12 million of the payout, was disappointed about her inability to rise higher and was later fired for being insubordinate.

The settlement sends a big statement that maybe she was a troublemaker, but her claim must have had merit or they wouldn’t have paid so much, ” said Hydie Sumner, a broker who knows how hard big firms will fight to avoid paying out discrimination claims.