Objectors Claim Morgan Stanley Settlement Was ‘Lawyer Driven’
A federal judge is considering an evidentiary hearing into a contention that a $16 million Morgan Stanley racial discrimination settlement was “lawyer driven.”
Linda Friedman, a lawyer for about 30 African-American retail brokers, said during a hearing yesterday that the class action settlement had been negotiated with defense lawyers before a lead plaintiff was designated, the Recorder reports. Lead counsel for the class were James Finberg and Lieff Cabraser. Morgan Stanley was represented by Morgan, Lewis & Bockius.
Friedman said the settlement leaves in place a Morgan Stanley policy that redistributes clients after a broker leaves based on “power rankings.” Friedman said the rankings are a byproduct of the firm’s past bias against blacks, the story reports. She also said the diversity monitor who would oversee the settlement lacks power to compel compliance.
Finberg responded in court papers that plaintiffs counsel started working with the lead plaintiff a few months before settlement talks began.
Senior Judge Thelton Henderson of San Francisco withheld final approval of the settlement and said an evidentiary hearing might be necessary.
