For the second time this year, Morgan Stanley has agreed to settle a class-action lawsuit, this time covering racial and ethnic discrimination of black and Latino employees in its retail brokerage division.
The lawsuit challenged inequities in opportunities for blacks and Latinos in the distribution of accounts and other professional development and was filed on behalf of approximately 1,200 black and Latino financial advisers and financial-adviser trainees employed at Morgan Stanley at any time since Oct. 12, 2002.
To settle, Morgan Stanley agreed to enter a five-year arraignment that, upon court approval, will establish a fund to settle claims, according to a statement from the plaintiffs' lawyers and Morgan Stanley.
The settlement's terms are confidential but will be revealed in a public filing with San Francisco-based Federal Judge Thelton Henderson in the near future, according to the law firm Lieff Cabraser Heimann & Bernstein.
"This settlement commits Morgan Stanley to implementing policies and programs to ensure that African-American and Latino financial advisors are able to compete and thrive on the same terms as their white colleagues," said Kelly M. Dermody, partner at Lieff Cabraser Heimann & Bernstein, co-lead class counsel.
Earlier this year, Morgan Stanley agreed to pay $46 million to settle allegations brought by approximately 2,700 female financial advisers and trainees who claimed they were denied promotions because of their gender. In that case, Morgan Stanley agreed to adopt new programs in areas such as account redistribution, training and management development, all specifically designed for female financial advisers. (See also: Morgan Stanley Settles Gender-Bias Lawsuit for $46M).
According to Lieff Cabraser Heimann & Bernstein, the current settlement includes comprehensive injunctive relief regarding recruiting and hiring, account-distribution policies, partnership arrangements, promotions, retention, diversity training and complaint processing. Moreover, the settlement establishes an independent diversity monitor who will bring about the terms of the agreement. In addition, the settlement establishes a class monetary-settlement fund along with a special master who will determine the allocation of monies among the plaintiffs.
When called for comment, Morgan Stanley's corporate-communications department referred DiversityInc to its statement: "Morgan Stanley is committed to the success of our financial advisers, regardless of race or color, and we view this settlement as a positive step forward."
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