Morgan Stanley’s former head of diversity has filed a lawsuit accusing the firm of hampering her efforts to bring diversity into an organization with senior leaders who are predominantly white men.
Marilyn Booker had been with the firm for 26 years when she was “abruptly terminated” earlier this year, according to the suit filed on Booker’s behalf by the law firm Wigdor. From 1994 to 2010, Booker was the firm’s global head of diversity, and from 2011 to 2020, she was the head of Morgan Stanley Urban Markets Group, a wealth management unit “focused on inner-city communities and working with individuals, non-profit organizations, small businesses, trade organizations and financial, educational and health institutions to deliver financial education programs,” according to Booker’s bio.
Morgan Stanley, CEO James Gorman and Barry Krouk, identified as "currently Managing Director, Chief Administrative Officer, Field Management at Morgan Stanley, within its Wealth Management division," are named as defendants in the suit filed before the U.S. District Court, Eastern District Court of New York.
Booker’s suit alleges that Morgan Stanley “actively sought to silence those who speak out and try to advocate for change when it comes to diversity and inclusion.”
“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,” the suit says. “Clearly, Black lives did not matter at Morgan Stanley.”
“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. In fact, Gorman is infamous for saying, ‘If you don’t like it, then leave,” the suit says. “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.
Morgan Stanley then allegedly informed Booker in December 2019 that she would be terminated, and when she inquired about staying on in another role, including as a financial advisor with no base pay, a managing director in the firm’s human resources department told her “there were no other options,” the suit says. In addition, even though Booker’s official last day was Mar. 9, 2020, the company allegedly deactivated her email account, office phone and mobile work phone in January, according to the suit.
"National tragedy and public outcry"
The suit also alleges rampant discrimination at Morgan Stanley, as evidenced by the meager numbers of African Americans in senior positions.
At the firm’s board of directors, 10 of 14 members were men as of January 1, while 10 were white, three were Asian and only one was African American, according to the suit. While the total number of managing directors at Morgan Stanley isn’t publicly known, the firm has appointed 1,382 people to the position since 2012 — but only 41 of the managing directors are African American, the suit says.
Morgan Stanley’s board of directors “suffers from the same lack of diversity as its Operating Committee, the suit says. Within the board, as of January 1, 10 of 14 members were men and 10 were white, and since Morgan Stanley’s inception in 1935, the firm has only had two Black persons on its board, the suit adds.
And before the appointment of Carol Greene-Vincent, an African American, to the firm’s operating committee — the firm’s most senior governing body — 13 of the 16 committee members were men, only three were women, 14 of 16 were white “and none were Black,” according to the suit.
“Disgustingly, it took a national tragedy and public outcry to get one Black woman a seat on the Operating Committee,” the suit says.
Gorman announced the appointment of Greene-Vincent to the committee earlier this month, in a LinkedIn post that also touted a $5 million donation to the National Association for the Advancement of Colored People Legal Defense Fund and an investment of $25 million toward a new Institute of Inclusion at the firm.
The announcement came in the wake of the death of George Floyd, an African American, while in police custody in Minneapolis last month, which has ignited mass protests nationwide calling for racial justice.
“Morgan Stanley has had decades to get its house in order and improve its record on diversity and inclusion,” Jeanne Christensen, a partner at Wigdor, says in a statement. “No more excuses. The numbers speak for themselves and Morgan Stanley must be held accountable for looking the other way.”
Booker’s suit is seeking collective action claims under the Equal Pay Act on behalf of all Black female employees employed by Morgan Stanley in New York and unspecified monetary damages.
Morgan Stanley denies the allegations.
“We strongly reject the allegations made in this claim and intend to vigorously defend ourselves in the appropriate forum,” a Morgan Stanley spokeswoman says in a statement. “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. We will continue to advance our high priority efforts to achieve a more diverse and inclusive firm.”
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