On June 16, 2020, Marilyn Booker filed a Complaint in the United States District Court for the Eastern District of New York charging Morgan Stanley & Co., LLC, James Gorman, and Barry Krouk with ten causes of action including discrimination; retaliation; aiding and abetting unlawful discrimination and retaliation; and violations of equal pay laws. Marilyn Booker, individually, and on behalf of similarly situated Black female employees, Plaintiff, v. Morgan Stanley & Co., LLC, James Gorman, in his individual and professional capacities, and Barry Krouk, in his individual and professional capacities, Defendants (Complaint, EDNY, 20-CV-02662)
1. In a June 9, 2020 article appearing in the New York Post, James Gorman, Morgan Stanley's Chief Executive Officer ("CEO"), is described as being so "moved" by the protests and global outrage in the aftermath of the racist murder of George Floyd, that he created a new Institute of Inclusion group at the Firm aimed at promoting diversity within Morgan Stanley (which he would chair). Gorman also announced that he would fast-track the promotions of two Black women; Carol Green-Vincent to the Firm's Operating Committee (making her its first and only Black member), and Susan Reid to the Firm's Management Committee.2. Gorman's announcements came on the heels of a heavily-publicized multi-million dollar donation by Morgan Stanley to the NAACP Legal Defense and Education Fund and an agreement to match donations of all U.S. employees to the organization.3. It is no surprise that Gorman would publicly announce these initiatives during a moment which he has described as a "turning point in race relations." These measures would appear, on their face, to be genuine efforts at increasing inclusion and diversity at Morgan Stanley -- the Wall Street investment Firm synonymous with "Corporate America," which manages more than $3 trillion in assets, generated over $41 billion in revenue in 2019, employs tens of thousands of people worldwide (and many thousands in this country), but whose leadership is dominated by White executives and Board members.4. For decades, Morgan Stanley employees have helped elite wealthy Americans, primarily White people, invest their money so that they can earn more money. However, like all companies in corporate America, Morgan Stanley has to make choices about its own employees and the policies that impact these employees. It is, after all, employees that fuel its business of making more money for Americans that already have money.5. Unfortunately, time and time again, Morgan Stanley has utterly failed when it has had to actually look itself in the mirror and decide whether it wants to truly address its deepseated racially unjust policies that have resulted in alarmingly low and disproportionate numbers of Black and other employees of color amongst its ranks, and, in particular, its executive ranks. Rather than seriously examine its own role in perpetuating inequalities in hiring, pay and promotion, and in fostering toxic workplace cultures and consumer discrimination, Morgan Stanley has instead repeatedly stopped short of any meaningful major overhauls during prior opportunities for change.6. Most troubling, Morgan Stanley has, in true hypocritical fashion, actively sought to silence those who speak out and try to advocate for change when it comes to diversity and inclusion.7. Marilyn Booker was one such Morgan Stanley victim. She paid the ultimate price by losing her job merely because she pushed too hard for reforms that would disrupt the status quo on White dominance and result in more Black and minority employees at Morgan Stanley, including among Morgan Stanley's Financial Advisor ("FA") and FA trainee ("Trainee") ranks.8. For 26 years Ms. Booker, the former Global Head of Diversity and the sole Black female Managing Director ("MD") in the Wealth Management division at Morgan Stanley's New York City headquarters, raised her voice about the irrefutable and appalling patterns she saw regarding the hiring, retention and lack of advancement of Black employees, detailed, infra, ¶¶ 53-108. Tirelessly, but to no avail, Ms. Booker tried to force Morgan Stanley's leadership, including Gorman, to address the systemic racial discrimination rampant at the Firm.9. While Gorman is quick to now pay lip service and throw money at the diversity problem at Morgan Stanley because he is suddenly "moved," when it was Ms. Booker's job to do just that - i.e., to work with the Black community and increase both diversity in the workforce and the Firm's reputation around diversity in the community - Morgan Stanley did nothing but actively hamstring her ability to do so, such by steadily decreasing her budget year over year. Ms. Booker would request in writing, almost every year, for more money from Morgan Stanley to support her diversity efforts, but was constantly denied even though her budget would not amount to a drop in the bucket for Morgan Stanley when compared to the money it threw at other initiatives and the massive revenue the Firm generated. In some years Ms. Booker had to dip into her own pocket and spend thousands of her own dollars just to attend events that promoted diversity so that Morgan Stanley would not humiliatingly go unrepresented.10. Clearly, Black lives did not matter at Morgan Stanley.11. In one particularly vivid example of the racial discrimination and toxic harassing environment to which she and other Black employees at Morgan Stanley were subjected, rather than reward Ms. Booker for securing a client who brought in over $90 million into the Firm to invest, Morgan Stanley stood by and did nothing when a White male executive who was upset that he could not take credit for the client ran around and told employees that Ms. Booker:"Pulled my pants down and ripped me a new asshole."12. Notably, in 2008, while still serving as Morgan Stanley's Global Head of Diversity, Ms. Booker testified before the United States House of Representatives on the issue of diversity in the financial services industry. During her testimony, Ms. Booker made the following ominous remarks, which horrifically and cruelly hold relevant and true today:In spite of the progress that has been made, and the presence of more women and minorities in the financial services sector, these groups still have skepticism about whether firms will care about them and their careers. . . .[Individuals from these minority groups] want to find out about your commitment to meritocracy. They want to find out about your commitment to diversity, and they want to find out about your support systems. Therefore, the firms that do not have the infrastructure to support this investment in time and to support building these relationships will not be as successful as those that do. . . .My final observation is that the management structure must be engaged in implementing meaningful diversity initiatives so that employees at large feel engaged. We have all heard the expression, "People don't leave a company; they leave their manager." Diversity is no different. An organization can have all the top leadership commitment there is; however, if this commitment is not communicated on a regular basis, the people who are responsible for the day-to-day, the broader efforts to have a more diverse workforce will be significantly challenged.13. Rather than heed her advice, Morgan Stanley exploited Ms. Booker as a "token response" and symbol of its purported commitment to diversity - trotting her out for publicity opportunities whenever it believed such showcasing was necessary or beneficial.14. Shockingly, 11 years after her remarks to Congress, in 2019, Morgan Stanley punished Ms. Booker for trying to address the systemic racial discrimination that permeates and is an open secret at the Firm - the very type of initiative that Gorman has recently planted media stories to pat himself on the back for being "woke" or "moved" enough to come up with.15. Specifically, Ms. Booker pushed for reforms to the status quo aimed at addressing the lack of diversity at Morgan Stanley, and in particular created a proposal to internally remedy the unequal and marginalized treatment she saw inflicted on employees of color, including minority FAs and Trainees. She would lose her job for doing so.16. Notably, among the Morgan Stanley wealth advisors recognized in the 2019 Forbes Top Wealth Advisors List, there are only five (5) Black FAs among the combined 487 FAs on all the teams. Likewise, in a race discrimination lawsuit filed in 2016, seven former Morgan Stanley FAs recounted how White colleagues excluded them from conversations after team meetings and how managers refused to share potential clients with them. See Frazier, et al. v. Morgan Stanley, No. 16 Civ. 804 (RJS), Dkt. No. 60 (S.D.N.Y. 2016).17. Throughout the fall of 2019, Ms. Booker repeatedly asked Firm leadership to simply listen to her plan. Part of Ms. Booker's urgency was her belief that post-Gorman's appointment as CEO, the racial bias had increased in recent years rather than decreased.18. Indeed, under Gorman's helm between 2017 and 2019, there was a sudden mass exodus of 14 Black Managing Directors ("MD") out of the few dozen Black MDs that were at Morgan Stanley. Upon information, while one of these Black MDs retired, Morgan Stanley made no effort to convince the other departing Black MDs to remain at the Firm.19. In fact, Gorman is infamous for saying, "If you don't like it, then leave."20. For Black MDs departing Morgan Stanley, the sentiment at the Firm was "good riddance" and "glad to see you go," rather than, "why are they leaving us?" or "how could we do better?" In contrast, when White MDs left or sought to leave, the Firm made significant efforts to retain them.21. Despite initially feigning interest and support about Ms. Booker's plan for diversifying the FA and Trainee ranks, Morgan Stanley consistently and humiliatingly ignored and evaded her. Finally, after her continued tenacious requests to be heard, on November 18, 2019, Ms. Booker met with two female employees in the diversity department -- not senior leaders with whom she was walled off from meeting -- to go over a draft presentation of her project. At this meeting, Ms. Booker repeated her desire that she present her plan before senior leadership.22. Not only did Morgan Stanley leaders refuse to merely listen to a plan to remedy rampant bias against Black FAs and Trainees, but it swiftly engaged in its own despicable discrimination against Ms. Booker.23. In horrifying fashion, on December 9, 2019, Morgan Stanley ruthlessly fired Ms. Booker after nearly 26 years of dedicated and loyal service. Having had no performance issues, Ms. Booker was blindsided. No explanation for her firing was given other than typical corporate posturing that her position - which was primarily to help Black people and people of color - was simply being eliminated.24. Morgan Stanley once again made it clear that Black employees did not, in fact, matter and silenced a brave employee that dared speak out about the economic injustice she knew existed.25. Despite the Firm's hollow promises and orchestrated "photo opportunities," through its actions taken against Ms. Booker, it is clear that diversity is the last thing Morgan Stanley cares about. Nowhere is this truth clearer than in the facts underlying Ms. Booker's claims. Notwithstanding Morgan Stanley's attempts to silence Ms. Booker, she intends to cast light on the bias that has caused harm to her and countless numbers of Black employees, particularly Black female employees at Morgan Stanley.26. It is clear that once the curtain is pulled aside and the deftly-crafted public messages are scrutinized, the truth is that Morgan Stanley has, and has had, no interest whatsoever in disrupting the status quo that has kept power and control of the Firm in the hands of White men.27. Rather than lead and be brave, under Gorman's rule, Morgan Stanley weakly continues to follow the herd.
"Bill Singer Replies to SEC Commissioner Aguilar's
Call for Boardroom Diversity"
(BrokeAndBroker.com Blog / May 6, 2011)http://www.brokeandbroker.com/869/luis-aguilar-bill-singer-diversity/
The Securities and Exchange Commission ("SEC") just published the text of a recent speech by Commissioner Luis A. Aguilar that I republish verbatim:The Abysmal Lack of Diversity in Corporate Boardrooms is Growing Worse (Statement by SEC Commissioner Luis A. Aguilar, U.S. Securities and Exchange Commission, Washington, D.C., May 2, 2011)http://www.sec.gov/news/speech/2011/spch050211laa.htmToday, the Alliance for Board Diversity released a report, Missing Pieces: Women and Minorities on Fortune 500 Boards - 2010 Alliance for Board Diversity Census, that confirmed what many of us have known for some time. The abysmal statistics regarding the lack of diversity in Corporate America are growing worse. This report found that women and minorities lost ground in America's corporate boardroom between 2004 and 2010.Specifically, the report finds that in the Fortune 100, between 2004 and 2010, white men increased their share of board seats in corporate America from 71.2% to 72.9%. Minorities and women shared the remainder with very few seats occupied by Asian Pacific Islanders, Hispanics or minority women in particular.Thus, even though there are more qualified diverse candidates for corporate board seats than ever before, fewer of these candidates are being chosen for corporate board seats. Even though our nation has grown more diverse, the corporate boardroom is proving resistant to change.I find this status quo unacceptable and question why at a time when there are more qualified diverse board candidates, we have less diverse board members.Bill Singer's ReplyIf I have one quibble with Commissioner Aguilar, it would be to ask him a simple question: Where have you been? Let me refer the Commissioner to excerpts from three articles that I wrote on the very topic of diversity that he now belatedly raises.Why Is the NYSE and NASD Soft on Racism and Sexism (BrokeAndBroker.com, March 9, 2006)http://www.brokeandbroker.com/index.php?a=blog&id=10[N]ot that I would ever suggest that there's one set of rules for the major broker-dealers, and another set of rules for smaller BDs and their employees, BUT, gee . . . odd, isn't it - the NYSE and NASD just don't seem that bothered by discrimination and harassment in their own industry. Please, show me the cases those regulators brought in the past 50 years in which member firms were charged with permitting racial or sexual discrimination/harassment.And what's the message? The regulators unwittingly encourage intolerant behavior by not deeming these practices to be conduct that offends basic notions of "high principles" and "honor." Do the SROs see such conduct as nothing more than an indiscretion?Wall Street is no longer a quaint road between a church, on one end, and a river, on the other. It is a metaphor for the entire capitalist world. And that world, which we all live in, is populated with minorities and women. Try as Wall Street has for generations to marginalize those two groups, the fact is now inescapable. The securities markets in the United States are in a battle with international markets. If we don't re-tool our industry to include more minorities and women in meaningful roles, we will inevitably lose out to more enlightened competitors. The NYSE may well become a luxury residential condominium. NASD may well become an off-shore gambling site.I can think of nothing more disgusting than to know that you are capable of doing a job but are denied employment solely based upon conditions of your birth. I hear these heart-rending stories virtually every day when I am contacted by potential clients. If this cancer is tolerated by Wall Street's regulators, how will we ever destroy it? If the NYSE and NASD see fit to bar folks from the brokerage industry because they have had felony convictions for drunk driving, then it's high time we roll out the same artillery to combat illegal discrimination.Women and Minorities on Wall Street: New Ad Campaign (BrokeAndBroker.com November 14, 2008)http://www.brokeandbroker.com/index.php?a=blog&id=89Equal Opportunity[C]lick on the television spot entitled "BrokerCheck" Watch it. After you're done, continue reading.First off, this "Brokercheck?" spot urges investors to "check to see if a broker makes sense for you" at FINRA's online Brokercheck service. Maybe it's me (yeah, again, I know, I'm an oddball) but the implication I think the regulator is trying to send (or at least the logical inference that I am drawing) is that the five guys depicted in the broadcast spot are not all on the up-and-up. The regulator is saying that you just can't tell who you're dealing with these days. Lots of shady characters on Wall Street. Lots of crooks. That's the point of the spot, as I see it. Use FINRA's Brokercheck service and we'll let you know if your broker is a crook. Am I right?Now, let me make one last point. Remember the scene of the five apparent brokers? Three seem to be Caucasian, one is African-American, and one appears to be of South Asian ethnicity (I would swear it is Aasif Mandvi of the Daily Show, you tell me).How nice it is of FINRA (and Wall Street as a whole) to finally recognize the existence of minorities within its ranks. Wonderful! Twenty percent of Wall Street's brokers are African American and another twenty percent are South Asian. What a proud record of minority rights. Forty percent of Wall Street's brokers are African-American and South Asian males. Maybe someone can check those statistics out? I mean, you know, the FINRA commercial shows five guys, and only three are white-that's 60%; and by deduction, that leaves 20% as black and 20% as South Asian. I don't think FINRA would have misrepresented the make-up of Wall Street's stockbrokerage ranks. Certainly, not in the context of a commercial suggesting that some brokers are crooks. Then again, how nice that we've come such a long way that FINRA was comfortable even exposing itself to the criticism that it unfairly depicted minorities as representing 40% of Wall Street's brokers.Then there is this one, last aspect of FINRA's ad. Not a single woman is portrayed!True, let's be fair. When Wall Street hires women it's more likely than not to be as a secretary, a receptionist, or in some behind the scenes role with reduced opportunities to make the really big bucks. I mean, come on now, walk into a branch office (no, not those that recently shuttered close-go to some that are still in business) and do a boy-girl head count. You probably won't find that many women stockbrokers. But, that is not to say that the good folks at FINRA don't have a role for women in mind. If you look at the regulator's "Bear Market" television commercial, you will see that they have a woman pushing a shopping cart in a supermarket -- and she's bedecked in such a nice sweater set too.In retrospect, maybe FINRA's Brokercheck spot is sending a fair message-after all, perhaps it's only the males you need to worry about as being unethical brokers, or maybe just the Caucasian, African-American, and South Asian ones. What a fine outcome for Latino and non-South Asian male brokers, and all those women too.Women and Minorities on Wall Street: Part Two (BrokeAndBroker.com: November 17, 2008)http://www.brokeandbroker.com/index.php?a=blog&id=90[S]urely, women are about more than pushing a shopping cart. It's not that the scene is unflattering as much as it perpetuates an image, particularly within the context of the three-part campaign, that men are the professionals on Wall Street and women are, at best, shoppers. Similarly, given how few minorities and women make up the corps of stockbrokers on Wall Street, I'm not sure that this is the time and place to highlight the allegedly ethnic and sexual mosaic of the FINRA regulated community-particularly when the actual statistics are not remotely on point.If you still want to take issue with my point, here's what I would ask you to consider. How many female, African-American, and South Asian CEOs and Chairpersons are there at the top 50 FINRA member firms? Excluding, say, Stan O'Neal and Vikram Pandit, how many recent or current CEOs or Chairs with those same attributes can you even name?We now have Barack Obama set to enter the White House. We have Mary Schapiro at the helm of FINRA. About 13% of the U.S. population is described as African-American. About 4% is described as Asian (a far more expansive category than South Asian). About 51% is female. I'd love to see the actual statistics, but I'll bet you that I'm right about the following:51% of FINRA member firm stockbrokers are not women;14% of FINRA member firm stockbrokers are not African-American; and4% of FINRA member firm stockbrokers are not Asian.Finally, yeah, I concede the point, our society as a whole doesn't measure up. That includes law firms. That includes accounting firms. That includes every aspect of our workforce when in comes to the built-in discrimination between higher and lower paying jobs. However, as to Wall Street, until we begin to approach the reality of our population mirroring our employee population, let's be a tad more sensitive about showing minorities in ads suggesting that some brokers are not honest, and let's be a tad more sensitive in presenting advertising campaigns that are one-third devoted to dogs rolling over and one-third devoted to women pushing shopping carts.Final ThoughtsCommissioner Aguilar's official SEC biography presents a remarkable career that includes service as a high-profile dealmaker and Wall Street legal counsel. Rather than a mere academic or political crony, Aguilar had the chops for his role at the SEC. However, in these challenging times, he must do more than mount the bully pulpit provided by the SEC, especially when he sees the congregation dozing off or the spirit is not moving them. The present SEC is chaired by a woman (Mary Schapiro), two of the four commissioners are women (Kathleen L. Casey and Elisse B. Walter), and Aguilar was named by Hispanic Business Magazine in 2006 as one of the "100 Influential" Hispanics in the United States. Given the commendable diversity on the SEC, what more motivation is needed for its commissioners and Chair to get behind Aguilar's initiative?Having failed the investing public time and time again while it dilly dallied amidst signs of widespread market fraud and corruption, the least that we should expect from the five individuals that compose the SEC is some effort to transform Aguilar's legitimate call for corporate-board diversity into action.