The U.S. Equal Employment Opportunity Commission (EEOC) announced 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.