The plaintiffs alleged that Morgan Stanley prevented minority financial advisers from fairly competing for business opportunities and higher compensation. The complaint charged that branch office managers and sales managers deal out accounts and referrals to brokers in a biased manner.
The other terms of the settlement agreement, which still requires court approval, include a promise by the investment bank to direct $7.5 million toward internal diversity efforts. This means that a diversity monitor will oversee the settlement terms and the company will work with industrial psychologists to increase minority representation among its brokerage staff.
Morgan Stanley did not agree to any wrongdoing in the pact, which will last five years, according to Reuters.
Morgan Stanley agreed in April to a $46 million settlement over allegations that it discriminated against its female financial advisers. In particular, the suit said that the investment firm offered more favorable training and mentoring as well as more lucrative accounts and promotions to men (See Morgan Stanley Agrees to $46M Settlement in Gender Discrimination Suit ).
The investment bank said in August it would settle the suit brought on behalf of about 1,200 black and Latino financial advisers and trainees employed at Morgan Stanley since October 12, 2002, but had not yet agreed on a settlement price (See Morgan Stanley Settles Race Discrimination Suit ).
The proposed settlement in the racial discrimination case is here .