Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

Sen. Warren Leads Query to SEC, FINRA on Sexual Harassment in Finance

Your article was successfully shared with the contacts you provided.

Three female senators are probing the Securities and Exchange Commission and Financial Industry Regulatory Authority on how widespread sexual harassment is in the financial services sector.

According to Equal Employment Opportunity Commission data, the “finance and insurance” sector generated the ninth-largest number of sexual harassment claims filed with the agency from 2005 through 2015, Sens. Elizabeth Warren, D-Mass.; Dianne Feinstein, D-Calif.; and Catherine Cortez Masto, D-Nevada, wrote in their letters to the two regulators.

The financial services industry employs more than 6 million people, the senators wrote, and while other “high-level financial managers were forced to step down amid harassment allegations” in the last year, the financial sector “has had fewer public revelations of sexual harassment” than other industries.

“The silence,” the lawmakers argued, “appears to result from strong ‘cultural and financial forces’ in the industry that discourage speaking out, including payout of large settlements with nondisclosure agreements to harassment victims, class-action prohibitions, and forced arbitration.”

The SEC’s Office of Minority and Women Inclusion tasked with “assessing the diversity policies and practices of entities regulated” by the SEC, and through a set of Joint Standards issued by the office and other financial regulators in June 2015, puts OMWI in a position to provide the agencies “with unique insight into sexual harassment in the financial sector,” the senators said.

The senators asked the securities regulator to answer five questions, including to lay out the steps the SEC OMWI has taken, since issuing the Joint Standards, “to encourage financial firms to institute policies and disciplinary systems that prevent inappropriate sexual behavior in the workplace, including sexual harassment.”

In their letter to FINRA, the lawmakers note that in the self-regulator’s Dispute Resolution data, “discrimination or harassment” a category that includes discrimination on the basis of disability, age, gender, race, sexual orientation, national origin, religion, employment discrimination, and sexual harassment was one of the top 15 controversies listed in intra-industry FINRA cases in 2017.

Of the three questions the senators asked FINRA to answer, one was: “Of FINRA awards that went unpaid from 2010-2018, what is the dollar amount linked to arbitration awards related to workplace harassment, including sexual harassment?”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.