Morgan Stanley Will 'Vigorously Defend' Accusations Of Systemic Bias By Bank's Former Diversity Chief In Court

Morgan Stanley MS is facing a lawsuit brought by its former chief of diversity who alleged “systemic racial discrimination” against minorities at the bank. The bank is denying the accusations and will fight them in court.

What Happened

Marilyn Booker, the first diversity chief at the bank who served in that role for 16 years, accused Morgan Stanley of racial bias. She alleged that instead of making the changes she suggested to remedy the issue, the bank fired her in December, reported Bloomberg.

Morgan Stanley has vowed to "vigorously defend" the lawsuit. A bank spokesperson said, "We are steadfast in our commitment to improve the diversity of our employees and have made steady progress -- while recognizing that we have further progress to make."

Booker, who worked as a lawyer before joining the bank, accuses Morgan Stanley of having used her as a “token response” and a “symbol of purported commitment to diversity.”

Why It Matters

According to Bloomberg, of the 80 top executives of six large banks in the United States, only one is African American — Mark Mason, Citigroup Inc C Chief Financial Officer.

Booker says 14 out of 16 operating committee members at Morgan Stanley were white males before Carol Greene-Vincent was named the bank’s global audit head.

The bank's CEO James Gorman has placed Susan Reid, an African American, on the bank’s management committee, and announced a commitment to diversity and inclusion as a part of Morgan Stanley’s core values.

In September 2018, rival bank JPMorgan Chase & Co. JPM paid $24 million to settle a lawsuit brought on by six black financial advisors who claimed they were mistreated by the bank.

MS Price Action

Morgan Stanley shares traded 0.33% lower at $48.40 in the after-hours session on Tuesday. The shares had closed the regular session 2.45% higher at $48.56.

Image: Ajay Suresh via Wikimedia