Women Pick Up Small Change on Wall Street

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Allison Schieffelin

NEW YORK (WOMENSENEWS)–At the two-year anniversary of banking giant Morgan Stanley’s $54 million settlement of a sex-discrimination case, some women’s advocates express disappointment about the aftermath of what the presiding judge, Richard M. Berman, called at the time a watershed settlement “in safeguarding and promoting the rights of women on Wall Street.”

“Walk through the trading floor and you won’t see Penthouse centerfolds pasted on computer screens anymore, but in terms of women achieving greater parity of positions and salary, the gap is just as big as ever,” said Susan Antilla, Bloomberg News financial columnist and author of “Tales from the Boom-Boom Room: Women vs. Wall Street,” published by HarperCollins Publishers in 2002.

Today on Wall Street, women make up 87 percent of assistants but only 19 percent of brokers and 29 percent of senior-level management, according to a 2005 report issued by the Securities Industry Association and the women’s business research organization Catalyst, both based in New York.

Lee Spelman–a female managing director at JPMorgan Chase (a separate entity from Morgan Stanley) and co-head of the company’s Diversity Council responsible for seeing that women and minorities get proper representation across the company’s various divisions–says getting ahead on Wall Street is hard for many women due to the nature of the business.

“I’ve seen enormous changes in the 30 years I’ve been on Wall Street. But this is still a competitive business. No matter how many family-friendly policies we put in place, you can’t get around the fact that you have to do your job well. That means a huge commitment of time and energy that many women, especially once they have children, aren’t necessarily willing to make.”

But others feel a discriminatory culture still plays a significant role. The lead plaintiff in the Morgan Stanley suit, former bond saleswoman Allison Schieffelin, initially filed a complaint with the federal Equal Employment Opportunity Commission in 1998, claiming she was denied a promotion to managing director for gender reasons.

She was fired from Morgan Stanley in 2000–Schieffelin said this was in retaliation for her initial complaint; Morgan Stanley said it was due to insubordination–and the EEOC filed a case against the firm in federal court in 2001, alleging the bank denied equal pay and promotion to Schieffelin and other women in its institutional equities division.

340 Women Eligible for Settlement

Under the terms of the July 2004 settlement–negotiated 10 minutes before the opening of the trial–Schieffelin, as lead plaintiff, received $12 million. Another $40 million was earmarked for current and former employees if they chose to make claims. Up to 340 women employed in the firm’s institutional equities division between 1995 and 2004 were eligible. The remaining $2 million went toward new diversity programs to improve the lives of all Morgan Stanley women.

The suit joined a number of high-profile lawsuits filed against major Wall Street firms in the past decade. Leading New York investment banks Smith Barney and Merrill Lynch have paid over $200 million to settle sex discrimination suits since the late 1990s. In January, six female employees of the German investment bank Dresdner Kleinwort Wasserstein filed a still pending $1.4 billion suit against the firm, citing unfair and abusive treatment.

At Morgan Stanley, changes engendered by the 2004 settlement have included enhanced diversity training, an in-house ombudsperson responsible to the EEOC and an independent outside monitor who works with the firm to review and implement diversity programs. These join existing options such as flextime and 12 weeks paid maternity leave, all of which helps the company consistently land on Working Mother magazine’s “100 Best Companies” list. In January, Morgan Stanley also fired four senior employees after the company learned they had visited a strip club with clients after hours, a move lauded by the EEOC.

But a culture of silence still seems to surround questions of gender discrimination within the company. Women remain rare enough and the business cutthroat enough that it can feel dangerous to rock the boat.

“Nothing changed that I could see,” says one former Morgan Stanley employee who left the firm in early 2006 but still wished to remain anonymous. “The topic is quite taboo, There is a huge stigma attached to bringing it to light, even more so given all the lawsuits.”

She ventures that subtlety has risen–men are less likely to exhibit inappropriate sexual behavior–but the inequities haven’t disappeared. Nor are women more likely to raise discrimination issues beyond the confines of internal gossip.

“Once you’ve spoken, you’ve identified yourself as a whistle-blower,” she says. “From a social standpoint, you become a lone person who just doesn’t want to play by the unofficial rules of the game, and no one wants to be around that person.”

Women Make Small Gains

According to the Securities Industry Association, the percentage of white women and women of color rose nominally between 2001 and 2005 (from 32 percent to 33 percent and 9 percent to 11 percent respectively), but women still remain underrepresented in positions of power on Wall Street.

Though high-profile settlements like Morgan Stanley’s are a public embarrassment, they are still settlements, which means the particulars–including statistics about what women are paid and how they’re promoted–remain concealed under confidentiality agreements.

Such opacity helps explain why a proliferation of lawsuits hasn’t done more to change gender statistics in the industry, says Antilla.

“A firm is going to have to be embarrassed publicly before they’ll be motivated to change, and that will require women with the financial and emotional resources to pursue a big, open trial,” Antilla told Women’s eNews. “The world has to hear how bad things really are.”

Antilla does see a benefit to the attentions generated by the discrimination dialogue, especially when grouped with recent sex discrimination settlements from the Chicago-based Boeing Company and Atlanta-based Home Depot, major firms headquartered far from the insular confines of Wall Street.

“Women don’t feel as alone anymore,” she offers. “They hear other women’s stories and they feel emboldened to speak up. Though that may not be enough to change the culture, it’s certainly the first step. I hope that trend continues for a very long time.”

Nan Mooney is a journalist based in New York City and the author of “I Can’t Believe She Did That: Why Women Betray Other Women at Work.”

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