New York, NY: (Oct-23-07) A lawsuit seeking class action status was filed against Morgan Stanley, alleging that the firm discriminated against African American and Latino financial advisers, denying them business opportunities. Morgan Stanley was accused of preventing minority financial advisers from fairly competing for business opportunities and higher compensation. The complaint alleged that branch office managers and sales managers, who are virtually all white men, distribute accounts and referrals to brokers in a biased manner.
As part of a settlement reached, the accounting firm agreed to pay $16 million to settle the discrimination lawsuit. Further, as part of the deal, Morgan Stanley will set up a settlement fund for a group of more than 1,000 financial advisers who have worked at the firm's Global Wealth Management Group since 2002. The investment bank also agreed to spend an additional $7.5 million on internal diversity efforts, according to court papers filed in San Francisco federal court. The settlement at large is pending and requires court approval. [REUTERS: MINORITY DISCRIMINATION]