Wall Street Goes Silent on #MeToo

FINRA gathers extensive information on the brokers it oversees but has made a deliberate decision not to track data that might shed light on discrimination.

A woman who is sexually harassed at work is six and a half times more likely to change jobs than a woman who is not. So you might think that, a year and a half into the #MeToo movement, sexual harassment would be a front-burner issue for the people paid to diversify Wall Street.

Yet at a two-day conference of diversity experts in the securities industry in New York in late May, not one of the seven panels addressed the challenge of sexual harassment in the workplace. Nor was there interest in addressing concerns about sexual harassment from participants. When one moderator invited written questions, I filled out a card asking the panel of financial regulators about harassment at their agencies and at the companies they regulated. The moderator read out the other audience questions but ignored mine.

Speakers at the event, sponsored by the Securities Industry and Financial Markets Association, or SIFMA, Wall Street’s main lobbying group, included senior leaders in the securities industry, professionals who run diversity and inclusion departments on Wall Street, and researchers who assess the effectiveness of diversity initiatives.

The dearth of discussion about sexual harassment “doesn’t make sense,” a brokerage firm executive said to me, on the condition that I not name her or her firm. “At a conference like this, you have those conversations.”

It isn’t as if Wall Street has rid itself of harassment. A survey of 345 financial advisers earlier this year by Investment News found that five out of 10 advisors had witnessed or experienced harassment “at least a couple of times.” About 40 percent of the women in the survey said “a personal experience with sexual harassment played a role” in their decision to change firms or leave the industry.

In its most recent survey of securities firms’ diversity efforts, SIFMA learned late last year that its members’ efforts to advance women were failing in key areas. The survey, first launched in 1999, does not inquire about harassment at securities firms, according to Cheryl Crispen, SIFMA’s executive vice president for communications and marketing. But it does ask other gender-related questions that shed light on women’s progress in the industry.

SIFMA is not making the 2018 survey public, but a speaker at the conference, Gail Greenfield of the consulting firm Mercer, shared some of its findings. Less than a quarter of the industry’s executive-level employees are women, she said. And the pipeline isn’t promising. Greenfield presented slides showing that the hiring rate for men in staff jobs is 7 points higher than that of women and that the promotion rate for women moving out of staff jobs is almost three times lower than that of men. Women today occupy 33 percent of Wall Street jobs at the manager level and above, she said. Barring dramatic changes in the industry’s hiring and promotion policies, in 10 years, the portion of women in those management jobs will only have risen 3 percentage points, according to the survey’s projections. A more encouraging projection was the one for people of color, whose representation among managers is expected to increase from 23 percent today to 34 percent by 2028.

Other countries are doing far better when it comes to getting women in finance into leadership roles, as measured by gender equity on board executive committees, according to a 2016 report by consulting firm Oliver Wyman. The U.S. ranked 11th on the Wyman list, lower than Poland, Singapore, and South Africa.

SIFMA had publicly released its biennial diversity survey between 1999 and 2007 but after that kept its findings under wraps. The survey was a response to a series of high-profile gender discrimination cases on Wall Street in the 1990s and revealed some initial progress: The proportion of women stockbrokers inched up from 12 percent in 1999 to 19 percent in 2005. But in the 13 years since, progress has stalled, with female representation falling back to 17 percent last year, according to Wanda Brackins, head of diversity and inclusion at RBC Wealth Management and a moderator of one of the SIFMA panels.

When I asked Crispen what was behind SIFMA’s decision to keep the findings private, she said that management previously had decided to provide results only to SIFMA members but suggested that might change. “I don’t know that will be the case in the future,” she said. She also said SIFMA did not intentionally exclude sexual harassment from its conference agenda and that I’d made “a very good point” that it was an appropriate issue to include. “I think that we will look at ways to explore” the issue at next year’s diversity conference, she said.

I asked New York lawyer William B. Mack, the panel moderator who declined to address a question about sexual harassment, why he’d made that decision, but he referred me back to Crispen. She suggested that my query was off-topic for a panel addressing the Dodd-Frank mandated work of diversity offices at Financial Industry Regulatory Authority and other financial regulators. SIFMA’s conference program, though, said the panel would offer a broad discussion of regulators’ views on “fostering a diverse and inclusive workplace within the financial industry.”

Pinning the industry down on gender and diversity can be a challenge. Last fall, I asked a SIFMA spokeswoman for a gender breakdown of brokers since the 1990s. She said she didn’t have that data and suggested I contact FINRA, the aforementioned self-regulatory group that oversees stock brokers. Later that same day, a FINRA spokeswoman told me FINRA didn’t have those numbers either and suggested I get in touch with SIFMA.

FINRA gathers extensive information on the brokers it oversees but has made a deliberate decision not to track data that might shed light on discrimination. When a participant at last week’s conference asked Audria Pendergrass Lee, head of diversity at FINRA, whether her agency tracks data on the gender, race, and age of people who take the broker licensing test, she said FINRA has “made the decision not to collect that information.”

Conference speaker Pamela Gibbs, head of the Office of Minority and Women Inclusion at the Securities and Exchange Commission, wrote Sen. Elizabeth Warren a letter last year in response to detailed questions about sexual harassment at the firms it regulates. Gibbs said she simply couldn’t provide much of the information the senator had requested. “It is unlikely that OMWI would receive data identifying sexual harassment allegations at a regulated entity,” she wrote, “because … it does not request information relating to sexual harassment or any other type of employment discrimination.”

Though the panelists all failed to address sexual harassment, several did offer examples of constructive efforts they were making in other areas. Some firms are encouraging female sales assistants to buy the client “books” of their mostly male bosses who are retiring, which would elevate those women to full-fledged brokers. Others are supporting LGBT employees by taking a hard stand when they don’t approve of a customer’s discriminatory behavior: One speaker said that her firm’s CEO declined to sell a product to a sovereign wealth fund in Singapore because of the nation’s human rights failings, particularly when it came to the LGBT community. John Taft, vice chairman of the Minneapolis brokerage firm Baird, described his efforts as a vocal proponent of marriage equality, setting himself up as a potential role model for other top executives considering public stands on diversity issues.

As for women, the glacial rate of change is having an impact on morale. Younger women in the financial business are discouraged by the environment and opportunities in finance, according to the 2016 Wyman report. Millennial women told Wyman researchers they were shocked at how few women were in the industry and that they felt isolated and pressured to “adapt to the style and preferences” of men to get ahead. The experiences of millennial women with respect to gender inequality “remain disappointingly similar to those of more senior women who joined the financial services industry in the 1980s and 1990s,” the report said.

Gibbs, the SEC diversity officer, has been engaged in labor and diversity issues for decades, having worked in the civil rights division of the Department of Labor for 18 years before becoming a diversity officer first at the Commodity Futures Trading Commission and then at the SEC. When she was asked at the conference how diversity and inclusion would look in another 10 or 15 years, she offered little encouragement. “I see nothing really changing,” she said.

This article was produced in partnership with Type Investigations.

About the reporter

Susan Antilla

Susan Antilla

Susan Antilla is an award-winning investigative journalist, columnist, and author writing about business and finance.