In a lawsuit filed in US District Court in Manhattan, Lisa Underwood, former head of SG Cowen’s Collaterized Debt Obligations Group, said that her supervisor Greg Medcraft discriminated against her based on her gender, Dow Jones reported. She worked at SG Cowen from December 2000 to December 31, 2002. The suit names SG Cowen, its parent Societe Generale, Jean-Pierre Mustier, head of SG Cowen’s corporate and investment banking business, Medcraft and Pierre Schroeder, another SG Cowen executive.
Underwood, 34, brought the cash-flow arbitrage CDO business to SG Cowen when she was hired in 2000, according to the suit.
In her lawsuit, Underwood said that there was a hostile work environment at SG Cowen almost from the time she was hired. The suit says her boss remarked, “It doesn’t hurt to have a woman as the head of the group, you know. We don’t have too many of those” when she was hired. Later, after a conference with a female insurance executive, someone at the meeting said the insurance executive wasn’t particularly friendly. Medcraft responded in Underwood’s presence, “yeah, but she’s got great legs,” according to the lawsuit.
Further, in September 2002, one of her employees suggested to Underwood that they hire prostitutes to entertain clients after a business dinner. Underwood refused to approve the expense and said she wouldn’t attend if he hired prostitutes.
The employee instead went over her head to ask for approval from Medcraft and Schroeder to take the clients to a strip club after dinner. They approved expenses up to $4,000 without consulting Underwood, the suit says. The evening’s bill turned out to be more than $4,000, but the employees were still fully reimbursed, the suit charged. “Ms. Underwood found this experience demeaning, awkward and unprofessional to her as a female executive,” the suit says.
All of the other securitization groups were headed by men at the time, the suit says. Those executives were given the title managing director. When Underwood suggested she be given the same title, Medcraft, her supervisor, laughed and said that wasn’t possible, the suit charges. Medcraft also turned away Underwood’s request for an office for some time, even though all of the male group heads had their own offices, according to the lawsuit. Later, the company assigned her to share an office with another woman.
Other executives also obstructed her ability to do her job, delaying deals or keeping her out of the loop, the suit says. One of her employees later told her after an April 2002 meeting in which other executives looked to her underlings, rather than her for answers, that the managers didn’t want to hear from “the girl,” according to the lawsuit.