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Sen Elizabeth Warren Copyright Alex Wong, Getty Images

Warren Gets Scant Help From Wall Street Watchdogs on #MeToo Push

Finra records show that since 2010, just four brokerage terminations “appear” to reference sexual harassment or may have been tied to it.

By Elizabeth Dexheimer and Ben Bain

(Bloomberg) --Elizabeth Warren is struggling to get data that shows how bad sexual harassment might be on Wall Street.

To make sure financial firms don’t dodge the #MeToo movement, the Massachusetts senator asked a top regulator last month for information it has on terminations tied to sexual misconduct. The Financial Industry Regulatory Authority’s response wasn’t very illuminating.

Finra records show that since 2010, just four brokerage terminations “appear” to reference sexual harassment or may have been tied to it, according to a March 14 letter that the agency’s chief executive officer, Robert Cook, sent to Warren and two other Democratic senators. The regulator -- which is funded by the industry -- said it reviewed 1.1 million termination notices filed between 2010 and 2018.

Still, the data may not reveal the depth of sexual harassment on Wall Street. Finra analyzed what are known as U4 and U5 forms -- disclosure documents that financial firms must fill out when employees become registered brokers and when workers leave. The forms are designed to catch instances when brokers cheat clients, not situations when they mistreat coworkers.

Limited Oversight

“Information regarding potential sexual harassment in the workplace generally is not solicited on the the forms U4 and U5, as the forms focus on information specific to investment-related and investor-protection matters,” Finra’s Cook wrote to Warren, California Senator Dianne Feinstein and Nevada Senator Catherine Cortez Masto.

Cook added that because Finra’s oversight is limited to brokerages, it doesn’t have access to data on sexual harassment involving banks, mutual funds, hedge funds and insurers. A Finra spokesman declined to comment beyond Cook’s letter to lawmakers.

Warren, Feinstein and Cortez Masto also wrote to the Securities and Exchange Commission, which had even less to report. The agency’s Office of Minority and Women Inclusion established standards in 2015 to encourage firms to prevent inappropriate sexual behavior. Since then, no companies have notified the SEC unit of experiencing any problems with workplace discrimination, including sexual harassment, according to a March 14 letter. An SEC spokeswoman declined to comment.

View's Special Report on Harassment and Financial Services

Warren, in March 1 letters to Finra and the SEC, said financial firms had seemed to avoid the high-profile, sexual-misconduct scandals that have rattled Hollywood, politics and other industries because of how complaints are dealt with. Due to a “strong” culture on Wall Street of paying out large settlements with non-disclosure agreements, victims’ allegations may never become public, Warren wrote.

She is making it her mission to change that. Her exchanges with Finra and the SEC are likely the first of other requests, as she seeks to expose potential misdeeds in an industry she’s long battled with.
To contact the reporters on this story: Elizabeth Dexheimer in Washington at [email protected] ;Ben Bain in Washington at [email protected]

To contact the editors responsible for this story: Jesse Westbrook at [email protected] Gregory Mott


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