A group of Morgan Stanley reps involved in a race-discrimination suit are objecting to a proposed $16-million settlement, saying it's just not enough. The settlement amount was reached in October on behalf of 1,300 African-American and Hispanic advisors who said the firm discriminated against them by directing more client accounts to white employees.
Lawyers for about a dozen members of the group wrote in a court document that the amount is, “grossly inadequate, and will not provide meaningful relief or adequate compensation to the victims of the firm's systemic racial discrimination, nor will it provide any incentive for the firm to address its entrenched discriminatory practices and culture.” Furthermore, they wrote, it “pales in comparison with amounts recovered for class members in other cases in the retail brokerage industry.”
The court document, filed on November 9, cites a recent Morgan Stanley gender-discrimination settlement where the firm agreed to pay $46 million to about 2,700 women, as well as a $54-million settlement granted to about 340 Morgan women who worked in the company's Institutional-Equities division in 2004.
A Morgan Stanley spokeswoman says the firm “believes this settlement is both fair to current and former employees, and is an innovative way to address historical industry issues. When approved by the court, it will meaningfully advance our efforts to foster diversity and professional success within our Financial Advisor force.”