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Advisor Sues Morgan Stanley, Alleging Sexual Discrimination and Harassment
In a federal lawsuit, Kelley McGoldrick claims she was treated as a “sex-prop” to attract male clients.
Kelley McGoldrick said that when she worked at Morgan Stanley, she missed out on pay and was harassed because she is a woman. The former financial advisor is suing Morgan Stanley, alleging that during her time at the firm, she was treated as a “sex-prop” to attract male clients.
McGoldrick, who previously filed a charge of discrimination against Morgan Stanley with the Equal Employment Opportunity Commission, filed a lawsuit against the firm on Wednesday, alleging sexual discrimination and harassment. McGoldrick is seeking $750,000.
“Morgan Stanley’s corporate culture dictates a narrow role for women: supporting men as sexual props to attract male clients or as administrative support for high producing men,” the suit said.
Morgan Stanley previously settled two sex discrimination cases: one in 2004, and one in 2007, the New York Times reported at the time.
“Morgan Stanley is fully committed to equal employment opportunity and is proud of the fact that its training program for new financial advisors is approximately 50 percent diverse,” a spokesperson for Morgan Stanley said via email. “The plaintiff left that program voluntarily in 2017 to join a competitor without ever reporting under Firm policy the dated claims she has now filed in litigation. We intend to defend the matter vigorously.”
McGoldrick began working at Morgan Stanley at its Wellesley, Massachusetts, branch in 2012 as a part of its financial advisor associate program, which trains employees with prior experience to sell securities or investment products, according to her suit.
She allegedly was in the minority at her branch: there were 35 male financial advisors, and just four female advisors, the suit said.
In 2013, McGoldrick’s manager allegedly recommended that she enter into a joint production agreement with Bruce Ledoux, a senior vice president at the firm, under which the two would split revenue. These agreements, according to the suit, are an option for financial advisor associates.
According to the suit, under these agreements, the financial advisor associate sources clients, while the partner helps to close the deal. Morgan Stanley’s policies allegedly suggest that the revenue is split: 25 percent goes to the advisor associate, while the remaining 75 percent goes to the partner, or in this case, Ledoux.
However, according to the suit, Ledoux allegedly insisted that the revenue split would be 96 percent to him and 4 percent to McGoldrick.
During their time working together, LeDoux allegedly pressured McGoldrick to prospect clients in two ways: either seeking out divorced women to work with or to flirt with potential male clients.
McGoldrick’s suit says she brought in clients whose assets totaled $1.5 million. After doing so, she allegedly asked if the revenue split could be revisited, but instead, LeDoux allegedly dissolved the partnership.
In 2014, McGoldrick attended a financial advisor associate training program. Her suit alleges that at that training, male advisors in the program allegedly passed around nude photos of women, made sexual jokes about her, and used the word “vagina” many times during a presentation to ensure that those watching paid attention.
During that training, one man allegedly touched McGoldrick’s upper thigh, a move that was “unwelcome and unexpected,” according to the suit.
McGoldrick’s suit alleges that she complained to the staff at the associate training and to her direct supervisor.
[II Deep Dive: More Allocators Said They Would Consider Investing With Managers Entangled In Sexual Harassment Allegations. Here’s Why.]
In 2017, McGoldrick left the firm, according to the suit. “It became very clear to Ms. McGoldrick that the male-dominated culture at Morgan Stanley was not going to be one where she could professionally grow or develop,” the suit said. She now works as an advisor at wealth manager Capital Financial Advisors, its website, and her LinkedIn profile show.
McGoldrick’s lawyer, Rosalind Herendeen of Wilkenfeld, Herendeen & Atkinson, wrote in an email, "The #MeToo movement exposed the rampant sexual harassment problems in the entertainment and media industries in ways that we hadn't previously seen. We think this case is incredibly important in that it exposes the sex discrimination and harassment that is prevalent in the financial services industry but which, to date, has been left largely unaddressed."