Gender Class Action Settlement With Morgan Stanley Announced Today

Today, the law firms of Mehri & Skalet, PLLC, Sprenger & Lang, PLLC, and Moody & Warner, P.C. announced a significant settlement with Morgan Stanley & Co. Incorporated f/k/a Morgan Stanley DW Inc., on behalf of approximately 2,700 female Financial Advisors and Registered Financial Advisor Trainees employed at Morgan Stanley at any time since August 5, 2003. This lawsuit focuses on gender inequity in the distribution of accounts and other business opportunities. The lawsuit derives from the Women on Wall Street Project announced by the National Council of Women's Organizations and Mehri & Skalet three years ago this month in an effort to address historic gender inequity in the financial sector.

Eight women from five states served as named plaintiffs in an amended complaint filed today. Co-Lead Counsel Steven Sprenger praised the women "for courageously stepping forward to bring about change in one of America's most powerful institutions." He noted that plaintiffs' counsel interviewed over 200 class members in 35 states and "the momentum behind the investigation became a powerful engine for meaningful change."

Co-Lead Counsel Cyrus Mehri declared that this is "one of the ten largest monetary awards in a gender discrimination settlements in U.S. history." He added that "most importantly, we anticipate that this settlement will have an enduring impact on the way America's financial institutions treat female financial advisors."

The parties entered into a five-year settlement agreement that is subject to Court approval. The settlement is valued at over $70 million, starting with a lump sum payment by Morgan Stanley of $46 million which will likely accrue interest of over a million dollars. Morgan Stanley will make an additional, yet to be determined payment to the Settlement Fund for the employer's share of payroll taxes, The Settlement Fund will likely approach $50 million in total. A Special Master is expected to determine the allocation of monies among the female financial advisors.

The parties estimate that, in addition to the Settlement Fund, the changes called for in the programmatic relief will increase the earnings of female financial advisors by at least $16 million over five years and the diversity efforts by the Company over five years will cost an additional $7.5 million.

The settlement was the result of two years of intensive negotiations, including over 15 days of in-person mediation sessions. Mehri hailed the settlement as a "milestone in the struggle for gender equity in the brokerage industry. Today begins a new day at Morgan Stanley and could chart a new course for an industry plagued by gender inequity." He added that "Morgan Stanley deserves credit for working with us in a collaborative, proactive way over the two years of negotiations."

Among the highlights of the programmatic relief are a new account distribution system, the appointment of independent external experts charged with developing innovative, novel programs impacting business and development opportunities for female financial advisors, and the appointment of an independent Diversity Monitor who will review account distribution data and other reports impacting fairness and equal opportunity in the brokerage house. Mr. Sprenger explained that "a key feature of the settlement is the creation of a new monitoring system to ensure that the Settlement is carried out as intended."

A fact sheet on the settlement is available upon request to jlee@findjustice.com .

CONTACT: Cyrus Mehri (202) 822-5100 Steven Sprenger (202) 265-8010