Morgan Stanley has agreed to pay $16 million to settle a discrimination lawsuit brought on by black and Latino financial advisers who said that they were denied business opportunities.
The agreement also calls for the New York-based financial services company to spend an additional $7.5 million on internal diversity efforts, according to papers filed in San Francisco federal court today, according to Reuters.
Under the agreement, Morgan Stanley will set up a settlement fund for a group of more than 1,000 financial advisers who have worked in the company's Global Wealth Management group since 2002.
In addition, a diversity monitor will oversee the settlement terms and the company will work with industrial psychologists to increase minority representation among the brokerage staff.
"This settlement is an innovative way to address historic industry issues and will advance our efforts to foster diversity and professional success within our Financial Advisor force," the company said in an e-mail.
The agreement requires court approval.
The plaintiffs had accused Morgan Stanley of preventing minority financial advisers from fairly competing for business opportunities and higher compensation.
The complaint said that branch office managers and sales manager, virtually all of whom were white males, would distribute accounts and referrals to brokers in a biased manner.
Morgan Stanley did not agree to any wrongdoing in the settlement.