The investment bank Morgan Stanley is being sued by its former head of diversity, who claims its senior, “white male-centric leadership” refused to adopt her plan to address racial bias at the firm, and instead fired her in December.
Marilyn Booker headed diversity at Morgan Stanley from 1994 to 2010 before taking on a project known as the Urban Markets Group, which sought to promote money management in inner cities by connecting minority financial advisers to minority communities.
However the program was rendered ineffective after it was steadily stripped of its budget, with 71 per cent of its budget being removed by 2019, Booker said in a lawsuit filed on Tuesday and reported by the Financial Times, Fortune and other outlets.
Booker said in her 47-page complaint that “her budget would not amount to a drop in the bucket for Morgan Stanley when compared to the money it threw at other initiatives and the massive revenue the firm generated.”
Booker argued in court documents that the initiative was needed because only about 100 of Morgan Stanley’s 16,000 financial advisers are Black.
Morgan Stanley’s latest published disclosures on diversity show that 2.2 per cent of its most senior executives in the U.S. were Black or African-American, the second lowest representation recorded by any of the big five U.S. banks.
Booker’s complaint firmly painted the alleged discrimination as hypocritical in the context of Morgan Stanley’s response to George Floyd’s death, in the he wake of which the bank made a large contribution to the NAACP Legal Defense & Education Fund and promoted two Black women to senior leadership committees. Booker noted that CEO James Gorman had described the present moment as a “turning point in race relations.”
However Booker said the bank’s actions told a different story, saying: “Clearly, Black lives did not matter at Morgan Stanley.”
Morgan Stanley told the FT it strongly rejected the allegations and intended to vigorously defend itself, adding that Booker was let go as part of a round of 1,500 lay-offs late last year.
It said: “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.”
Booker is seeking unspecified financial damages.
Booker also claims Morgan Stanley nixed her efforts to recruit a Black National Basketball Association player as a spokesperson and later signed up white golfer Justin Rose instead.
“It goes without saying that Mr Rose was believed to be better recognized among the community of White male affluent golf aficionados, and not most members of the Black and minority communities,” she added.
“Morgan Stanley has had decades to get its house in order and improve its record on diversity and inclusion,” Booker’s lawyer Jeanne M Christensen, a partner at Wigdortod the FT. “No more excuses. The numbers speak for themselves and Morgan Stanley must be held accountable for looking the other way.”