OVER $40 MILLION TO BE PAID TO VICTIMS IN EEOC SEX BIAS SUIT AGAINST MORGAN STANLEY

Administrator Decides Morgan Stanley Must Pay Entire Claim Fund Set Up by $54 Million Discrimination Suit Settled Last Year

NEW YORK – The U.S. Equal Employment Opportunity Commission (EEOC) announced   today that a $40 million sex discrimination claim fund – which was established   pursuant to the $54 million landmark settlement last year with brokerage giant   Morgan Stanley – will be distributed to the 67 eligible discrimination   victims who came forward to participate in the claims process.

The EEOC's lawsuit, Civil Action 01-8421, filed in U.S. District Court for   the Southern District of New York on September 10, 2001, alleged that Morgan   Stanley had engaged in a pattern or practice of sex discrimination since 1995   against Allison Schieffelin and a class of other women, all employed in Morgan   Stanley's Institutional Equity Division (IED). The charges included claims that   Morgan Stanley regularly excluded women from work-related outings, paid women   less than male peers, and denied them warranted promotions.

The case settled on July 12, 2005, after a jury had been selected and just   prior to opening arguments slated to occur with Judge Richard M. Berman presiding,   when Morgan Stanley agreed to enter into a consent decree with the EEOC and   pay $54 million. The monetary award was structured so that Allison Schieffelin   – who initiated the EEOC's investigation by filing a charge of discrimination   in 1998 – was paid $12 million; $2 million was to be spent by Morgan Stanley   on new diversity initiatives in the division; and $40 million was earmarked   for distribution to eligible claimants via a claims process to be administered   by former federal Judge Abner Mikva as "special master." The three-year   consent decree also provides for increased anti-discrimination training for   associates and managers in IED and Morgan Stanley's hiring of an outside monitor   to assess the company's compliance and field employee complaints.

In the event that the special master did not distribute the entire $40 million   claim fund, the consent decree allowed for any remaining money to be used to   fund a scholarship program dedicated to women pursuing financial careers. As   Mikva awarded the entire $40 million, plus accrued interest up to June 1, 2005,   only a small amount of money will be set aside for this cause.

"This outcome was anticipated and warranted by the facts," said   Michelle Caiola, Senior Trial Attorney from the EEOC's New York District Office.   "After a rigorous written claims process, a neutral third party determined   that the claims submitted were valid and distributed the claim fund accordingly."

Elizabeth Grossman, the EEOC's New York District Acting Regional Attorney,   added, "We are hopeful that this suit has changed discriminatory practices   common to Wall Street. It should signal the industry that no matter how well-regarded   a financial institution may be, there is no safe harbor for employment discrimination."

In addition to enforcing Title VII, which prohibits employment discrimination   based on race, color, religion, sex (including sexual harassment or pregnancy)   or national origin and protects employees who complain about such offenses from   retaliation, the EEOC enforces the Age Discrimination in Employment Act of 1967,   which protects workers age 40 and older from discrimination based on age; the   Equal Pay Act of 1963, which prohibits gender-based wage discrimination; the   Rehabilitation Act of 1973, which prohibits employment discrimination against   people with disabilities in the federal sector; Title I of the Americans with   Disabilities Act, which prohibits employment discrimination against people with   disabilities in the private sector and state and local governments; and sections   of the Civil Rights Act of 1991. Further information about the Commission is   available on the agency's web site at www.eeoc.gov.