IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves,

)

Debra Shaw, Jan Tyler, Cheryl Giustiniano,

)

Laurie Blackburn, Erna Tarantino

)

and Elizabeth Reinke,

) Civil No.1 :06-cv-Ol142

) (RWRlDAR)

On behalf of themselves and all others similarly )

situated,

) CLASS ACTION

)

Plaintiffs,

) JURY TRIAL DEMAND

)

v.

)

)

Morgan Stanley & Co. Incorporated, f/k/a

)

Morgan Stanley DW Inc.,

)

)

Defendant.

)

AMENDED COMPLAINT

Plaintiffs, for their Amended Complaint against defendant Morgan Stanley & Co.

Incorporated f/k/a Morgan Stanley DW Inc. ("Morgan Stanley"), allege and state as

follows:

Introduction

1. This case arises out of Morgan Stanley's systemic company-wide

discriminatory treatment of its female financial advisors and female registered financial

advisor trainees in violation of federal and applicable state civil rights laws. Having

satisfied all administrative prerequisites, Plaintiffs now file this Amended Complaint.

72877

Parties A. Plaintiffs & Class Representatives - Financial Advisors 2. Plaintiff Joanne Augst-Johnson is a female resident and citizen of Plymouth, Minnesota. She was employed by Morgan Stanley as a financial advisor in its Wayzata, Minnesota branch from December 1999 through January 2006. 3. Plaintiff Nancy Reeves is a female resident and citizen of Colorado Springs, Colorado. She was employed by Morgan Stanley as a financial advisor in its Colorado Springs branch from July 1987 through July 2004. 4. Plaintiff Debra Shaw is a resident and citizen of Hayden, Colorado. She was employed by Morgan Stanley as a financial advisor in its Denver branch from 1991 through January 2005. 5. Plaintiff Jan Tyler is a female resident and citizen of Denver, Colorado. She was employed by Morgan Stanley as a financial advisor in its Denver branch from October 1996 through August 2005. 6. Plaintiff Cheryl Giustiniano is a female resident and citizen of Gig Harbor, Washington. She was employed by Morgan Stanley as a financial advisor in its Rancho Bernardo, California and Gig Harbor, Washington branches from July 1999 through August 2005. 7. Plaintiff Laurie Blackburn is a female resident and citizen of Alexandria, Virginia. She was employed by Morgan Stanley as a financial advisor in its Alexandria branch from April 1996 through August 2005.
2 72877

8. Plaintiff Ema Tarantino is a female resident and citizen of Reno, Nevada. She has been employed by Morgan Stanley as a financial advisor in its Reno branch since January 1990.
9. Plaintiff Elizabeth Reinke is a female resident and citizen of Barrington, Illinois. She was employed by Morgan Stanley as a registered sales assistant in its Barrington branch from 2000 through August 2005, and as a registered financial advisor trainee in its Barrington branch from August 2005 through August 2006.
B. Defendant 10. Defendant Morgan Stanley & Co. Incorporated f/k/a Morgan Stanley DW Inc. ("Morgan Stanley") is a Delaware corporation with its principal place of business in Purchase, New York. Since the Complaint was filed in June 2006, Morgan Stanley DW Inc. merged into Morgan Stanley & Co. Incorporated. The Named Plaintiffs and proposed Class Members all work or worked as financial advisors or registered financial advisor trainees in what is now referred to as the Global Wealth Management Group ("GWMG"). Morgan Stanley's GWMG currently maintains a field force of approximately 8,500 financial advisors and has branch offices throughout the United States.
Jurisdiction 11. This court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1343 and 1367 because this action is brought under Title VII ofthe Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq. prohibiting gender discrimination in employment, and with respect to three Plaintiffs, under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 1621 et seq.,
3
72877

prohibiting age discrimination in employment. This court has pendant jurisdiction over the claims brought pursuant to state and local laws prohibiting both gender and age discrimination in employment.
Exhaustion of Administrative Remedies 12. Plaintiffs have each filed timely charges of discrimination with the Equal Employment Opportunity Commission ("EEOC") and applicable state and/or local agencies alleging, among other things, class-wide gender discrimination against Morgan Stanley with respect to the compensation, promotion and termination of financial advisors in violation of Title VII and applicable state and/or local civil rights laws. 13. Plaintiffs have each received notices of right to sue from the EEOC and other administrative agencies upon the expiration of 180 days following the filing of said charges. Accordingly, Plaintiffs have each exhausted all administrative prerequisites for the maintenance of this action.
Facts 14. Since at least August 5, 2003, Morgan Stanley has systematically denied equal employment opportunities to its female financial advisors and female registered financial advisor trainees. Morgan Stanley has engaged in a pattern and practice of gender discrimination with respect to compensating and promoting women from the positions of financial advisor and/or registered financial advisor trainee to other more prestigious roles or positions such as, for financial advisors, branch/sales management positions, and, for registered financial advisor trainees, the position of financial advisor. Morgan Stanley has also engaged in a pattern and practice of gender discrimination with respect to other terms and conditions of employment of female financial advisors and
4 72877

registered financial advisor trainees that affect compensation and promotion opportunities including but not limited to: training and mentoring; account assignments; and participation in company-approved "partnership" arrangements with other financial advisors.
15. Female financial advisors and female registered financial advisor trainees have experienced discrimination with respect to training and mentoring.
16. Female financial advisors and female registered financial advisor trainees have experienced discrimination with respect to the assignment of accounts in multiple ways.
17. Female financial advisors and female registered financial advisor trainees have experienced discrimination with respect to participation in company-approved "partnership" arrangements with male financial advisors in several ways.
18. Female financial advisors and female registered financial advisor trainees have also experienced discrimination with respect to career advancement, most notably for female financial advisors in obtaining promotions to branch/sales management positions and for female registered financial advisor trainees in obtaining promotions to the position of financial advisor.
19. Female financial advisors and female registered financial advisor trainees have experienced discrimination with respect to other general terms and conditions of employment including, but not limited to, assignment of office space and sales support staff.
Class Action Allegations 20. Pursuant to Fed. R. Civ. P. 23(b)(2) and (b)(3), Plaintiffs Joanne AugustJohnson, Nancy Reeves, Debra K. Shaw, Jan Tyler, Cheryl Giustiniano, Laurie
5 72877

Blackburn, Erna Tarantino and Elizabeth Reinke seek to represent a nation-wide class

consisting of:

All women who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between August 5, 2003 and the present.

Plaintiffs reserve the right to seek to represent sub-classes of the nation-wide class.

21. Numerosity. The number of women in the class exceeds 2,000. It would

be impracticable to bring all, or even a substantial percentage of, such persons before the

Court as individual plaintiffs through joinder.

22. Commonality. There are questions of law and fact common to the class.

The overarching question of law and fact that is common to all members of the class is

whether Morgan Stanley, through the acts and/or omissions of its management and

supervisory workforce, has adopted and/or maintained a policy or practice of employment

discrimination that is generally applicable to the class. This overarching common issue

of law and fact includes numerous subissues of law and fact that are also common to all

members of the class. These subissues include, but are not limited to, the following:

•

Whether Morgan Stanley's female financial advisors and female registered

financial advisor trainees have been promoted at rates that are

disproportionately low compared to the rates at which male financial

advisors and male registered financial advisor trainees have been

promoted;

•

Whether Morgan Stanley'S female financial advisors and female registered

financial advisor trainees have been afforded treatment with respect to

numerous aspects of employment (including training, account distribution,

and partnership arrangements) that is less favorable than the treatment

afforded by Morgan Stanley to their male counterparts;

6
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•

Whether the reason that Morgan Stanley has afforded its female financial

advisors and female registered financial advisor trainees less favorable

treatment than their male counterparts is the acceptance of an stereotype;

•

Whether the employment policies or practices of Morgan Stanley that have

adversely affected its female financial advisors and female registered

financial advisor trainees violate Title VII under either a disparate

treatment or a disparate impact theory;

•

Whether Morgan Stanley's discriminatory employment practices constitute

a "continuing violation"; and,

•

Whether Morgan Stanley's discriminatory employment practices are

sufficiently egregious to justify the imposition of punitive damages under

Title VII.

23. Typicality. The claims of each of the above-identified class

representatives are typical of the claims of all class members because: (a) they have all

been subjected to the same company-wide practice of gender discrimination in

employment; (b) all of their claims are based upon allegations that they have been

adversely affected by that practice of gender discrimination in a similar manner in that

they have received less favorable treatment than their male counterparts with respect to

numerous aspects of employment; and, (c) their claims are all based on the same legal

theory or theories.

24. Adequacy of Representation. All of the above-identified proposed class

representatives are adequate representatives of the class because: (1) they are willing and

able to represent the proposed class and have every incentive to pursue this action to a

successful conclusion; (2) their interests are not in any way antagonistic to those of the

other class members; and (3) they are represented by counsel experienced in litigating

major class actions in the field of employment discrimination.

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25. Propriety ofMaintenance of Class Action Under Fed. R. Civ. P. 23(b)(2). Class action status is appropriate under Fed. R. Civ. P. 23(b)(2) because Morgan Stanley has acted and/or refused to act on grounds generally applicable to the class, thereby making declaratory and final injunctive relief appropriate. Such generally applicable grounds consist of the adoption and/or maintenance by Morgan Stanley of a common, company-wide policy or practice of gender discrimination in employment to which each member of the class has been subjected. Declaratory and final injunctive relief would predominate over monetary relief.
26. Propriety ofMaintenance ofClass Action Under Fed. Civ. P. 23(b)(3). Class action status is also appropriate under Fed. R. Civ. P. 23(b)(3). The common questions of law and fact identified above predominate over questions affecting only individual members. A class action is superior to other available methods for the fair and efficient adjudication of this litigation. Inasmuch as all members of the class are geographically dispersed throughout the country and allege that they were sUbjected to the same company-wide policy or practice of gender discrimination, requiring each class member to pursue her claim individually would entail needless duplication and would waste the resources of both the parties and the judiciary. The financial burden of proving Morgan Stanley engaged in such a pattern or practice of discrimination would also make the prosecution of individual actions virtually impossible for most, if not all, members of the class.
8 72877

COUNT I
EMPLOYMENT DISCRIMINATION ON THE BASIS OF GENDER -CLASS CLAIMS FOR RELIEF
27. Plaintiffs restate and reallege the allegations contained in Paragraphs 1 through 26 of this Amended Complaint as though set forth here in full.
28. Plaintiffs and members of the class are employees of Morgan Stanley within the meaning of 42 U.S.C. § 2000(e) et seq.
29. The discriminatory policies or practices of Morgan Stanley, as set forth in this Count, have denied Plaintiffs and members of the class their right to equal employment opportunity in violation of 42 U.S.C. § 2000(e) et seq.
30. Morgan Stanley has adopted and/or maintained a company-wide policy or practice of gender discrimination by, among other things, denying Plaintiffs and members of the class equal opportunities as described above.
31. Morgan Stanley has adopted and/or maintained subjective employment practices including, but not limited to, subjective practices for assessing and evaluating the ability and potential of its financial advisors and registered financial advisor trainees that have had the adverse impact of denying female financial advisors and female registered financial advisor trainees equal career advancement and other employment opportunities on account of their gender.
32. By reason of Morgan Stanley'S discriminatory policies or practices as set forth in this Count, Plaintiffs and members of the class have suffered damages including, but not limited to, lost income, lost benefits, embarrassment, emotional distress, humiliation, indignity and a reduced quality of life. Plaintiffs and members of the class
9
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are threatened with further injury and loss which are irreparable in nature and for which they have no adequate remedy at law.
COUNT II EMPLOYMENT DISCRIMINATION ON THE BASIS OF GENDER--
INDIVIDUAL CLAIMS FOR RELIEF 33. Plaintiffs Jan Tyler, Cheryl Giustiniano and Laurie Blackburn restate and reallege the allegations contained in Paragraphs 1 through 19 of this Amended Complaint as though set forth here in full. 34. Plaintiffs Jan Tyler, Cheryl Giustiniano and Laurie Blackburn experienced gender discrimination with respect to the terminations of their employment pursuant to Morgan Stanley's August 2005 "reduction in force." Upon information and belief, Morgan Stanley did not apply its RIF criteria consistently to male and female financial advisors and, as a result, Plaintiffs were terminated whereas similarly situated male financial advisors were retained. 35. Morgan Stanley'S termination of the employment of Plaintiffs was intentional, malicious, deliberate, willful and oppressive, and was carried out with reckless and callous disregard for their respective rights. 36. By reason of Morgan Stanley's discriminatory and unlawful employment practices as set forth in this Count, Plaintiffs Jan Tyler, Cheryl Giustiniano and Laurie Blackburn have suffered damage including, but not limited to, lost income, lost benefits, embarrassment, emotional distress, physical injury, humiliation, indignity and a reduced quality of life.
10 72877

COUNT III EMPLOYMENT DISCRIMINATION ON THE BASIS OF AGE --
INDIVIDUAL CLAIMS FOR RELIEF 37. Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw, who are each age 40 or above, restate and reallege the allegations contained in Paragraphs 1 through 19 and 34 of this Amended Complaint as though set forth here in full. 38. Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw were employees of Morgan Stanley within the meaning of 29 U.S.C. § 630 and other applicable civil rights laws prohibiting discrimination in employment on the basis of age. 39. The adverse employment actions experienced by Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw as described above, as well as the adverse treatment of Plaintiff Debra K. Shaw with respect to the company-imposed terms and conditions of the dissolution of her partnership arrangement, were also motivated by age bias in violation of 29 U.S.C. § 621 et seq. and other applicable civil rights laws prohibiting discrimination in employment on the basis of age. 40. Morgan Stanley's discriminatory and unlawful employment practices against Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw on the basis of age were intentional, malicious, deliberate, willful and oppressive, and were carried out with reckless and callous disregard for their respective rights. 41. By reason of Morgan Stanley's discriminatory and unlawful employment practices as set forth in this Count, Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw have suffered damage including, but not limited to, lost income, lost benefits,
11 72877

embarrassment, emotional distress, physical injury, humiliation, indignity and a reduced quality of life.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectively pray: 1. That this case be maintained as a class action on behalf of the proposed class; that Plaintiffs be designated as representatives of the class, and that their counsel of record be designated as Class Counsel; 2. That the practices of Defendant complained of herein be determined and adjudged to be in violation of the rights of the Plaintiffs and the members of the class under Title VII, the ADEA and state and local laws prohibiting gender and age discrimination in employment;. 3. That a permanent injunction be issued prohibiting Defendant and its officers, agents, employees and successors from engaging in the employment practices complained of herein; 4. That a permanent mandatory injunction be issued requiring that Defendant adopt employment practices in accord with the requirements of Title VII, the ADEA and state and local laws prohibiting gender and age discrimination in employment; 5. That judgment be entered in favor of Plaintiffs and the members of the class set forth herein, and against Defendant, for back pay (including interest or an appropriate inflation factor), front pay, benefits and all other amounts owed to Plaintiffs and the members of the class; 6. That the Plaintiffs and members of the class be awarded compensatory and punitive damages;
12 72877

7. That Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw be awarded liquidated damages to the extent allowed by law;
8. That the Plaintiffs and members of the class be awarded such other and further legal and equitable relief as may be found appropriate and as the Court may deem just or equitable;
9. That the Plaintiffs and members of the class be awarded costs including, but not limited to, attorneys' fees, experts' fees, and other costs and expenses of this litigation; and
10. That the Court retain jurisdiction over Defendant until such time as it is satisfied that it has remedied the practices complained of and is determined to be in full compliance with the law.
JUry Demand Plaintiffs demand trial by jury on all issues triable of right by jury.
13 72877

This 24th day of April, 2007.

IL1k (!l<;--~j

St en M. Spre er (DC No. 418736)
SPRENGER + LANG, PLLC
1400 Eye Street, N.W. Suite 500 Washington, DC 20005 (202) 265-8010
Mara R. Thompson (MN No. 196125)*
SPRENGER + LANG, PLLC
310 Fourth Avenue S. Suite 600 Minneapolis, MN 55415 (612) 871-8910

Mehri (DC No. 420970) Steven A. Skalet (DC No. 359804) Lisa M. Bomstein (DC No. 485933) Sandi Farrell (DC No. 491677) MEHRI & SKALET, PLLC 1250 Connecticut Ave, N.W. Suite 300 Washington, DC 20036 (202)822-5100
Chris Moody (NM No. 1850)* Whitney Warner (NM No. 10600)* MOODY & WARNER, P.C. 4169 Montgomery Blvd. NE Albuquerque, NM 87109 (505)944-0033

ATTORNEYS FOR PLAINTIFFS AND THE CLASS

*

Admitted Pro Hac Vice

14 72877

 
 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

JOANNE AUGST-JOHNSON, NANCY REEVES, DEBRA SHAW, JAN TYLER, CHERYL GUISTINIANO, and LAURIE BLACKBURN,
On behalf of themselves and all others similarly situated,
Plaintiffs, v.
MORGAN STANLEY DW INC.,
Defendant.

CIVIL ACTION NO. 1:06-cv-01142 (RWR/DAR)
CLASS ACTION

ORDER GRANTING JOINT EMERGENCY APPLICATION FOR AN INJUNCTION

After consulting with the mediator, Hunter Hughes, Esq., and with his full support, on April 6, 2007, Plaintiffs and Defendant Morgan Stanley DW Inc. presented a joint emergency application for an injunction seeking to enjoin them from disclosing what documents had been exchanged and discussed in the course of the settlement discussions and mediation in this action and, specifically, from making such a disclosure in an unrelated civil action, i.e., Husby v. Morgan Stanley DW Inc., Superior Court for the State of Alaska, Third Judicial District at Anchorage, Case No. 3AN-05-7823 CI. The parties in this action have participated in confidential mediation proceedings and ongoing settlement discussions under the terms of strict confidentiality agreements. As a result of the extensive settlement negotiations and mediation, the parties are close to finalizing a settlement of this matter.

1-PH/2619281.1

1

For the reasons articulated below, the Court finds that the parties have met the prerequisites for an injunction enjoining them from disclosing what documents and information were discussed or exchanged in their confidential settlement discussions and mediation to any third parties and, specifically, the index sought in the Husby litigation.
1. The confidentiality agreements executed by the parties in this action prohibit the parties from disclosing confidential mediation-related information to a third party in any other court or proceeding. In addition, the private mediation that the parties engaged in has had been considered by the parties to be a precursor to Court-sponsored final mediation. As such, both the confidentiality agreements executed by the parties and the principles of Local Civil Rule 84.9 operate to enjoin the parties from disclosing what was discussed or exchanged during their mediation and settlement discussions to any party and, specifically, from having to produce the index sought by Plaintiff Husby in her Alaska State Court action.
2. The parties will suffer irreparable harm in this case unless they are enjoined from disclosing what documents and information were discussed or exchanged in their confidential settlement discussions and mediation. The disclosure of what documents and information were discussed or exchanged reflects the parties' counsels' work product and would reveal their thoughts and impressions. The disclosure of this work product would also result in intangible damages that are impossible to quantify. The parties would not have an adequate remedy at law for such damages. Moreover, any disclosure of confidential information is irreversible once it occurs. Finally, the parties could be deemed to have waived any protections under the confidentiality agreement if forced to disclose information protected by the agreements to a third party.

1-PH/2619281.1

2

3. The public interest favors issuing an injunction. First, public policy favors the preservation of written agreements such as the confidentiality agreements entered into by the parties here in the course of their settlement negotiations and mediation. If the parties were compelled to disclose what confidential information and documents were exchanged or discussed during the settlement negotiations and mediation in this case, it will force the parties to violate the terms of their confidentiality agreements and the principles of Local Civil Rule 84.9. Additionally, the confidentiality of what information and documents were exchanged or discussed during settlement discussions and mediation fosters open communication and effective resolution. The disclosure of such information could have a chilling effect on parties' willingness to engage in settlement discussions and mediation. A decrease in the willingness of parties to participate in settlement discussions and mediation would, in turn, result in an increased burden on the courts to handle matters which would have otherwise been resolved.
4. The parties will suffer great hardship if the request for injunction is denied. The parties have invested time, money, and resources in settlement negotiations and mediation thus far. If disclosures were required, future settlement negotiations would be more guarded and less effective. The parties will be less likely to exchange information knowing that what was exchanged may be subject to disclosure to some third party in an unrelated lawsuit. Finally, nothing in this Order would preclude Plaintiff Husby from seeking in her case any information and documents to which she is entitled in discovery in her case, irrespective of whether such information and documents were exchanged in the parties' settlement discussions or mediation in this case.
Accordingly, IT IS HEREBY ORDERED THAT Defendant Morgan Stanley DW Inc. and its employees, agents and counsel, and Plaintiffs and their counsel, ARE HEREBY

1-PH/2619281.1

3

ENJOINED from disclosing what information or documents were discussed or exchanged during the mediation and settlement discussions to any party not specified in the parties’ confidentiality agreements and, specifically, from producing the index sought by Plaintiff Husby in her state court action, until further order of this Court. Plaintiff Husby shall have until May 7, 2007 to show cause in a written memorandum filed with this Court in this action why this injunction should not be made permanent. The Clerk is directed to mail and fax forthwith a copy of this Order to counsel for Plaintiff Husby: William F. Brattain, II, Esq., Baker Brattain, 821 N Street, Suite 101, Anchorage AK 99501, facsimile 907-279-2323.

So ordered this 6th day of April, 2007.

___________/s/________________ Richard W. Roberts United States District Judge District of the District of Columbia

1-PH/2619281.1

4

 
 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves,

)

Debra Shaw, Jan Tyler, Cheryl Giustiniano, )

Laurie Blackburn, Erna Tarantino,

)

and Elizabeth Reinke,

)

)

On behalf of themselves and all others similarly )

situated,

)

)

Plaintiffs,

)

)

v.

)

)

Morgan Stanley & Co. Incorporated, formerly )

known as Morgan Stanley DW Inc.,

)

)

Defendant.

)

Case No. l:06-cv-01l42 (RWR) CLASS ACTION

SETTLEMENT AGREEMENT

73725 I-NY12170287.2

Exhibit I to Joint Motion for Preliminary Approval

TABLE OF CONTENTS
I. INTRODUCTION .............................................................................................. 1 II. NATURE AND RESOLUTION OF THE CASE .............................................. 1 III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT ...................... 5
A. Definitions................................................................................................ 5 B. Duration of the Settlement ...................................................................... 9 C. Cooperation ............................................................................................. 9 D. Persons Covered by this Settlement Agreement .................................... 9 IV. COURT APPROVALINOTICE AND FAIRNESS HEARING ...................... 10 A. Jurisdiction and Venue ......................................................................... 10 B. Preliminary Approval ........................................................................... 10 C. Notice and Settlement Hearing ............................................................. 11 V. RELEASEIBAR OF CLAIMS ......................................................................... 15 A. Class Member Release .......................................................................... 15 B. Named Plaintiff Release ........................................................................ 15 VI. NO ADMISSION, NO DETERMINATION.................................................... 17 VII. PROGRAMMATIC RELIEF .......................................................................... 18 A. Communications.................................................................................... 18 B. Branch ManagementlMobility.............................................................. 19 C. Account Distribution ............................................................................. 20 D. Development Opportunities .................................................................. 26 E. Complaint Process and Training .......................................................... 27 F. Appointments........................................................................................ 28 G. General Non-Discrimination Provisions............................................... 31 VIII. MONETARY RELIEF ..................................................................................... 32 A. Settlement Fund. ................................................................................. 32 B. Administration by Trustee. ................................................................. 33 C. Claims Filing Procedures for Settlement of Claims of Named
Plaintiffs and Class Members. ............................................................ 34 D. Allocation Formula. ............................................................................. 35 E. Non-Admissibility of Fact of Award (or Non-Award)....................... 38 F. Tax Treatment....................................................................................... 38
I-NY/2170287.2

G. Morgan Stanley Has No Further Obligation, Liability or Responsibility........................................................................................ 41
IX. MONITORING................................................................................................. 42 A. Data Collection ...................................................................................... 42 B. Monitoring System ................................................................................ 42 C. Reports................................................................................................... 43 D. Meetings................................................................................................. 43
X. ENFORCEMENT ............................................................................................. 43 A. No Third Parties .................................................................................... 43 B. Dispute Resolution ................................................................................ 43
XI. CONFIDENTIALITY ...................................................................................... 43 A. Documents and Information Produced by Morgan Stanley and Class Counsel......................................................................................... 43 B. Return or Disposal of Confidential Documents and Information ....... 44
XII. ATTORNEYS' FEES AND EXPENSES OF CLASS COUNSEL .................. 45 XIII. GOVERNING LAW ......................................................................................... 46 XIV. OTHER CONDITIONS OF SETTLEMENT.................................................. 46
A. Exhibits.................................................................................................. 46 B. Notices to Counsel ................................................................................. 46 C. Failure to Insist on Strict Compliance.................................................. 47 D. Settlement Agreement Binding ............................................................. 47 E. No Drafting Presumption...................................................................... 47 F. Dispute As To Meaning of Agreement Terms ...................................... 47 G. Interpretation of Terms ........................................................................ 48 H. Paragraph and Section Headings ......................................................... 48 I. Counterparts ......................................................................................... 48 J. Agreement Binding ............................................................................... 48
I-NY/2170287.2 11

I. INTRODUCTION Subject to approval by the United States District Court for the District of Columbia
(the "Court"), this Settlement Agreement ("Settlement Agreement," "Settlement" or "Agreement") sets forth the full and final terms by which the Named Plaintiffs, on behalf of themselves and members of the Class defined herein, and Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. ("Morgan Stanley," "Defendant," "Firm" or "Company,,)1 have settled and resolved all claims that have been raised in the Amended Complaint filed by the Named Plaintiffs in April 2007. This Action and Settlement applies to women Financial Advisors and Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley ("MS-GWMG") and its predecessor(s).
II. NATURE AND RESOLUTION OF THE CASE A. Beginning in early 2005, Joanne Augst-Johnson, Nancy Reeves, Debra
Shaw, Jan Tyler, Cheryl Giustiniano, Laurie Blackburn, Erna Tarantino, and Elizabeth Reinke ("Named Plaintiffs") retained Class Counsel to investigate claims of sex discrimination at MS-GWMG. These Named Plaintiffs each filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging, among other things, that MS-GWMG discriminated against them and a class of similarly situated persons throughout the United States on the basis of their sex in several aspects of their employment.

Since the Complaint was filed in June 2006, Morgan Stanley DW Inc. merged into Morgan Stanley & Co. Incorporated. The Named Plaintiffs and Class Members all work or worked as Financial Advisors or Registered Financial Advisor Trainees in what is now referred to as the Global Wealth Management Group.

73725

1

1-NY/2170287.2

B. On June 22, 2006, the Named Plaintiffs filed a Complaint in the Court on behalf of themselves as individuals and on behalf of a nationwide class of women employees against Morgan Stanley pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq., ("Title VII"), and under parallel state and local laws prohibiting sex discrimination. In April 2007, the Named Plaintiffs filed an Amended Complaint naming Morgan Stanley & Co. Incorporated, the successor to Morgan Stanley DW Inc., as Defendant. In this Action, titled Augst-Johnson, et at v. Morgan Stanley & Co. Incorporated, Civil Action No. 1:06-cv-01l42 (RWR), the Named Plaintiffs, among other things, allege, on behalf of themselves and members of the Class defined herein, that they are women who are or were employed with MS-GWMG as Financial Advisors or Registered Financial Advisor Trainees, that they have been and are afforded fewer business opportunities than comparable male Financial Advisors and comparable male Registered Financial Advisor Trainees, and that they experienced sex discrimination in numerous aspects of their employment. They have further alleged, on behalf of themselves and members of the Class defined herein, that aspects of their employment in which they have experienced sex discrimination include, but are not limited to, career advancement, distribution of accounts, work assignments, compensation, and/or other terms and conditions of employment and/or termination. In addition to these class claims, the Named Plaintiffs assert various individual, non-class claims, including, for some, age discrimination, as set forth in the Amended Complaint.
C. On November 13, 2006, Morgan Stanley filed its answer and its affirmative defenses to the Complaint, denying that it engaged in a pattern or practice of sex discrimination against the Named Plaintiffs or any similarly situated current and former

73725

2

I-NY/2170287.2

women Financial Advisors or Registered Financial Advisor Trainees. Morgan Stanley denies the allegations in the administrative charges, the Complaint and the Amended Complaint, and in connection therewith denies any liability under Title VII of the Civil Rights Act of 1964, as amended, or any other federal, state or local laws, and specifically denies that Morgan Stanley unlawfully discriminated against Plaintiffs or Class Members on the basis of sex, or that Plaintiffs or Class Members are otherwise entitled to the relief requested.
D. In an effort to determine whether the parties could settle this dispute prior to the commencement of litigation, the parties' counsel, who are experienced class action attorneys, participated in detailed and exhaustive discussions and negotiations over the course of two years. The parties engaged the services of Hunter Hughes, Esq., a highly experienced professional mediator, skilled in mediation of complex class actions, including employment discrimination litigation. Mr. Hughes became familiar with the case and conducted over ten mediation sessions between the parties. These formal mediation sessions and follow-up settlement discussions between the parties concluded with the execution of this Settlement Agreement. During the negotiations, counsel bargained vigorously on behalf of their clients. All negotiations were conducted at arms' length and in good faith.
E. In order to facilitate settlement discussions, the parties executed tolling agreements covering the time period from December 27, 2004 to June 22, 2006, at which point the Complaint in this Action was filed.
F. For settlement purposes, Class Counsel sought, and Morgan Stanley produced to Class Counsel, voluminous data and other information concerning MS-

73725

3

I-NY/2170287.2

GWMG's workforce and work practices relevant to the claims asserted and damages sought by Plaintiffs and the Class. Class Counsel interviewed over 200 Class Members during the course of their investigation and retained an expert to conduct statistical analyses of the data. The expert worked with Class Counsel to review the data, ensure it was complete, request supplemental data, and analyze the data. The expert also conducted studies similar to those that would have conducted in preparation for the trial of this matter. Class Counsel also retained a second expert to assist in analyzing industry practices and to provide input on crafting injunctive relief. Counsel for the parties have also conducted their own substantial investigations of the matter, including the facts underlying the claims and issues raised in the charges, the Complaint and the Amended Complaint. The investigations included, among other things, interviewing Class Member witnesses and reviewing a substantial number of relevant company records. As a result of the exchange of information, the investigation, and other activity both prior to and after filing the Complaint, counsel for the parties are familiar with the strengths and weaknesses of their respective positions, and have had a full opportunity to assess the litigation risks presented in this case.
G. All parties and their counsel recognize that, in the absence of an approved settlement, they would face a long litigation course, including motions to dismiss, motions for class certification, formal discovery, motions for summary judgment, and trial and appellate proceedings that would consume time and resources and present each of them with ongoing litigation risks and uncertainties. The parties wish to avoid these risks and uncertainties, as well as the consumption of time and resources, through settlement pursuant to the terms and conditions of this Settlement Agreement. Class Counsel believe

73725

4

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that the terms of the Settlement Agreement are in the best interests of the Class and are fair, reasonable, and adequate, and Morgan Stanley wishes to bring the litigation to a conclusion on the terms set forth in this Settlement Agreement.
H. Without any admission or concession by Morgan Stanley of any liability or wrongdoing with respect to the allegations in any administrative charge or in the Complaint and the Amended Complaint, all released claims shall be finally and fully compromised, settled, and released subject to the terms and conditions of this Settlement Agreement, which were the subject of negotiation and agreement by the parties.
III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT A. Definitions. In addition to terms identified and defined elsewhere in this
Settlement Agreement, and as used in this Settlement Agreement, the terms below shall have the following meanings:
1. "Action" means the lawsuit described above and the allegations contained in the Amended Complaint filed in April 2007.
2. "Amended Complaint" means the Amended Complaint filed in this Action in April 2007.
3. "Claims Administrator" means Settlement Services, Inc. ("SSI") which has been jointly designated by counsel for the parties to administer the Settlement Fund pursuant to Section VIII below and orders of the Court.
4. "Claim Form" means the form agreed to by the parties and attached to the Notice. The Claim Form must be submitted by eligible Class Members to SSI as part of the claims process.

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5. "Claimant" means a Class Member who has submitted a timely Claim Form.
6. "Class Counsel" means the law firms of Mehri & Skalet, PLLC, Sprenger & Lang, PLLC, and Moody & Warner, PC.
7. "Class Member" means any person who meets the criteria set forth in the definition of "Settlement Class" below.
8. "Class Member Release" means the Release and Indemnification Agreement in the form agreed to by counsel for the parties, and attached hereto as Exhibit A, with respect to those Class Members who are not Named Plaintiffs, as referenced in
Section v.A.
9. "Complaint" means the Complaint filed in this Action on June 22, 2006.
10. "Court" means the United States District Court for the District of Columbia.
11. "Defendant" or "Morgan Stanley" or "Firm" or "Company" means Morgan Stanley & Co. Incorporated and its predecessors in interest.
12. "Defendant's Counsel" means the law firm of Morgan, Lewis & Bockius LLP.
13. "Depository Bank" means Branch Banking and Trust (BB&T) or another bank jointly selected by counsel for the parties to receive, hold, invest, and disburse the Settlement Fund, subject to the direction of the Claims Administrator.
14. "Diversity Monitor" means the individual appointed to carry out the duties specified in Section VII.F .1. of this Agreement.

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15. "Effective Date" means the date on which all of the following have occurred: (1) the Court has finally approved this Settlement Agreement and has signed and entered an order so indicating; (2) the Court has entered an Order and Judgment dismissing the Action with prejudice, with continuing jurisdiction limited to enforcing this Settlement Agreement; and (3) the time for appeal has either run without an appeal being filed or any appeal (including any requests for rehearing en banc, petitions for certiorari or appellate review) has been finally resolved.
16. "Final Approval" means the date on which the United States District Court grants final approval of the Settlement.
17. "Financial Advisor" means a person employed in the MS-GWMG as a financial advisor.
18. "Lead Class Counsel" means Cyrus Mehri ofMehri & Skalet, PLLC and Steven M. Sprenger of Sprenger & Lang, PLLC.
19. "MS-GWMG" means the Global Wealth Management Group of Morgan Stanley & Co. Incorporated and its predecessor, Morgan Stanley DW Inc.
20. "Named Plaintiff Release" means the General Release and Indemnification Agreement in the form, attached hereto as Exhibit B, agreed to by counsel
for the parties with respect to the Named Plaintiffs as referenced in Section v.B.
21. "Notice" means the Notice of Class Action, Proposed Settlement Agreement, and Settlement Hearing, which is to be mailed directly to Class Members, pending Court approval, substantially in the form attached hereto as Exhibit C.
22. "Notice of Award" means the letter sent to each eligible Claimant specifying the amount of that Claimant's award, as determined by the Special Master.

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23. "Plaintiffs" or "Named Plaintiffs" means the eight Plaintiffs named in the caption of the Amended Complaint.
24. "Preliminary Approval" means the Order of the Court preliminarily certifying the Settlement Class and preliminarily approving this Settlement Agreement and the form of Notice to be sent to Class Members.
25. "Registered Financial Advisor Trainee" means a person employed in the MS-GWMG as a registered financial advisor trainee who has not yet become a Financial Advisor.
26. "Settlement," "Agreement," and "Settlement Agreement" each mean the settlement as reflected in this Settlement Agreement.
27. "Settlement Class" or "Class" means the class that the parties jointly seek to have certified, solely for the purposes of this Settlement Agreement, which is defined as all women employed as Financial Advisors or Registered Financial Advisor Trainees in the MS-GWMG or its predecessor at any time between August 5, 2003 and the date of preliminary approval.
28. "Settlement Fund" or "Fund" means the settlement momes transferred by Morgan Stanley to the Depository Bank, pursuant to this Settlement Agreement, including all interest earned thereon, to be held, invested, administered, and disbursed pursuant to this Settlement Agreement.
29. "Settlement Hearing" means the hearing at which the Court will consider final approval of this Settlement Agreement and related matters.

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30. "Special Master" means the individual jointly selected by counsel for the parties, and approved by the Court, who is charged with carrying out the Special Master duties set forth in Section VIII. of this Agreement.
B. Duration of the Settlement. The programmatic relief embodied in this Settlement Agreement and the agreements incorporated in it shall remain binding on the parties and their agents and successors for a five-year period following the Effective Date.
C. Cooperation. The parties agree that they will cooperate to effectuate and implement all terms and conditions of this Settlement Agreement, and exercise good faith efforts to accomplish the terms and conditions of this Settlement Agreement. The parties agree to accept non-material and procedural changes to this Settlement Agreement if so required by the Court in connection with Final Approval of the Settlement, but are not obligated to accept any changes in the monetary amount of relief or the substantive programmatic relief provided for herein, or any other substantive change.
D. Persons Covered by this Settlement Agreement 1. Definition of "Settlement Class," "Class" or "Class Members."
Solely for purposes of Settlement and judicial approval of this Settlement Agreement, the parties stipulate to the certification of the following Settlement Class:
All women who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between August 5, 2003 and the date of preliminary approval. 2. Certification. The Class will be certified pursuant to Fed. R. Civ. P. 23(b)(2) and 23(b)(3).

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IV. COURT APPROVALINOTICE AND FAIRNESS HEARING A. Jurisdiction and Venue 1. The parties agree that the Court has jurisdiction over the parties and
the subject matter of this Action and that venue is proper. The Court shall retain jurisdiction of this Action for five years from the Effective Date of the Settlement Agreement solely for the purpose of entering all orders and judgments authorized hereunder that may be necessary to implement and enforce the relief provided herein.
B. Preliminary Approval 1. Prior to execution of this Settlement Agreement, the parties have
agreed upon a form for written Notice of this Settlement Agreement to Class Members, subj ect to Court approval.
2. Within twenty (20) days after the execution of this Settlement Agreement, the parties shall petition the Court for the following two orders:
(1) preliminarily certifying the Settlement Class; preliminarily approving this Settlement Agreement; approving the Notice to be sent to Class Members describing the terms of the Settlement and informing them of their rights to submit obj ections and to opt out; and preliminarily enjoining, pending the outcome of the Settlement Hearing, (i) all members of the Settlement Class from commencing, prosecuting or maintaining any claim already asserted in, and encompassed by, this Action, and (ii) all Class Members (including those who request exclusion) from commencing, prosecuting or maintaining in any court or forum other than the Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of

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the Court in connection with this Settlement Agreement or otherwise in connection with this Action; and
(2) entering Administrative Order No. 1 relating to this Settlement Agreement attached hereto as Exhibit D.
C. Notice and Settlement Hearing 1. MS-GWMG will identify all Class Members and will provide to the
Claims Administrator, within ten (10) days after Preliminary Approval of this Settlement Agreement, the name, social security number, and last known address of each Class Member. The Claims Administrator shall utilize Class Members' social security numbers only for the purpose of locating and identifying Class Members and shall keep those social security numbers confidential.
2. Within twenty (20) days after Preliminary Approval of the Settlement Agreement, the Claims Administrator will mail the Notice to each Class Member in the form agreed upon by the parties or such other form as approved by the Court. The parties intend to provide actual notice to each Class Member, to the extent practicable. The Claims Administrator shall mail a Claim Form to each Class Member at the same time the Notice is sent.
3. The Claims Administrator shall provide to Lead Class Counsel a list of those Class Members who have not been located and the Claims Administrator may engage third party vendors in order to locate Class Members. The Claims Administrator will maintain a log of its activities undertaken pursuant to this section.
4. Class Member objections to this Settlement Agreement must be submitted in writing, and must include a detailed description of the basis of the objection.

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Objections must be filed with the Court, with copies served on Lead Class Counsel and counsel for Morgan Stanley, within forty-five (45) days after the Notice is mailed to Class Members. No one may appear at the Settlement Hearing for the purpose of objecting to the Settlement Agreement without first having filed and served her objection(s) in writing within forty-five (45) days after the Notice was mailed to Class Members.
5. Any Class Member who wishes to opt out of the Settlement Class must mail to Lead Class Counsel and counsel for Morgan Stanley a written, signed statement that she is opting out, as set forth below. Lead Class Counsel shall file with the Court all opt-out statements that are timely received. The Settlement Class will not include those individuals who file and serve a timely opt-out statement, and individuals who opt out are not entitled to any monetary award under this Settlement Agreement. With respect to each such individual, the statute of limitations for her to assert any claims for individual relief will resume running on the postmark date when she mails her signed, written statement that she is opting out of the Settlement Class. The Notice mentioned above shall include the following language: "Any Class Member who wishes to opt out of the Settlement Class must mail a written, signed statement that she is opting out of the Settlement Class to [Lead Class Counsel and counsel for Morgan Stanley at the addresses as listed in the Notice]. To be effective, this opt-out statement must be received by [Lead Class Counsel and counsel for Morgan Stanley] on or before ___." [forty-five (45) days after the Notice is to be mailed to Class Members.] To be effective, the opt-out letter and statement must include the language specified in the Notice confirming that the individual is aware that by opting out she will forego the opportunity to receive monetary benefits from this Settlement. Class Members who file opt-outs may rescind their opt-outs.

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To be effective, such rescissions must be in writing and must be received by either Lead Class Counsel, counsel for Morgan Stanley, or the Claims Administrator on or before ___. [sixty (60) days from the date that the Notice is to be mailed to the class.]
6. Upon Preliminary Approval, a briefing schedule and Settlement Hearing date will be set at the Court's convenience. The parties' Motion for Final Approval and for Certification of the Settlement Class will be due no earlier than thirty (30) days following the close of the objection and opt-out period, and the Settlement Hearing will be held no earlier than forty-five (45) days following the close of the objection and opt-out period.
7. The time periods referenced in this Section IVC. are guidelines; actual dates will be inserted in the Preliminary Approval Order by the Court.
8. In the event that this Settlement Agreement does not become final and binding, no party shall be deemed to have waived any claims, objections, rights or defenses, or legal arguments or positions, including, but not limited to, claims or objections to class certification, and claims and defenses on the merits. Neither this Settlement Agreement nor the Court's Preliminary or Final Approval hereof shall be admissible in any court regarding the propriety of class certification or regarding any other issue or subject (except for the purpose of enforcing this Settlement Agreement). Each party reserves the right to prosecute or defend this Action in the event that the Settlement Agreement does not become final and binding.
9. If the number of Class Members who have duly requested exclusion from the Settlement Class in the manner provided in the Court's Preliminary Approval Order equals or exceeds the numbers set forth in Appendix 1 filed with the Court under

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seal concurrently with this Settlement Agreement, Morgan Stanley shall have the right, for thirty (30) days after the deadline for Class Members to opt out, to either withdraw from and fully terminate this Settlement Agreement by providing written notice to Class Counsel and the Court, or not to withdraw from this Settlement Agreement and take the opt out credit described below. Failure to provide written notice to withdraw within the aforesaid thirty (30) day period constitutes a waiver and termination of Morgan Stanley's right to withdraw pursuant to this paragraph. The opt out credit to which Morgan Stanley is entitled shall be a pro rata share of the Settlement Fund based on the number of Class Members who have opted out in relation to the total number of Class Members. Regardless of the number of Class Members who opt out, Morgan Stanley shall also have no obligation to pay the employer's share of taxes and contributions pertaining to such opt outs, as discussed in Section VIII.F.2. of this Settlement Agreement.
10. If Morgan Stanley exercises its option to withdraw from the Settlement or if this Settlement Agreement is not approved by the Court or for any other reason is terminated or fails to become effective in accordance with its terms (or, if following approval by this Court, such approval is reversed or substantively modified), the parties shall be restored to their respective positions that existed in this Action prior to entering into this Settlement Agreement; the terms and provisions of this Settlement Agreement shall have no force or effect and shall not be used in this Action or in any proceeding for any purpose; the Settlement Fund shall be returned to Morgan Stanley, including the interest earned by the Settlement Fund through the date of termination (after deducting all costs and expenses, including costs of providing Notice to Class Members, paid or incurred by the Claims Administrator as of the date of termination); any Judgment

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entered by the Court in accordance with the terms of this Settlement Agreement shall be treated as vacated, nunc pro tunc; and the litigation of the Action will resume as if there had been no Settlement Agreement, with no stipulated Class. The parties retain all rights, claims, and defenses as to class certification and otherwise as to any of the allegations asserted in this Action. This Settlement Agreement will not be considered an admission of liability by Morgan Stanley nor represent a cap on damages available to the Named Plaintiffs or the Class.
v. RELEASEIBAR OF CLAIMS
A. Class Member Release. All Class Members, other than the Named Plaintiffs, as a condition of receiving a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator a Class Member Release in the form agreed to by counsel for the parties and attached hereto as Exhibit A. The Class Member Release will release all sex discrimination claims against Morgan Stanley under federal, state and local laws, including claims related to sexual harassment and termination of employment, for any period up through the date of Preliminary Approval.
B. Named Plaintiff Release. All Named Plaintiffs, as a condition of receiving a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator either the Class Member Release attached hereto as Exhibit A or a broader Named Plaintiff Release in the form agreed to by counsel for the parties and attached hereto as Exhibit B. The Named Plaintiff Release is not a limited release of claims of sex discrimination but instead releases all claims of any nature

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against Morgan Stanley under federal, state and local laws for any period up through the date of Preliminary Approval.
C. The Claims Administrator shall provide all Class Members, including Named Plaintiffs, with the Class Member Release at the time the Notice is provided to them.
D. The Claims Administrator shall also provide all Named Plaintiffs with the Named Plaintiff Release at the time the Notice is provided to them. If a Named Plaintiff wishes to submit a Class Member Release in lieu of the broader Named Plaintiff Release, such Named Plaintiff must deliver a signed writing received by the Claims Administrator on or before the date established by the Court for receipt of opt outs, with copies to Lead Class Counsel and Defendant's Counsel, making that election. If a Named Plaintiff does not make a timely election in writing to submit a Class Member Release, then the Named Plaintiff will be required to submit the Named Plaintiff Release.
E. The terms of the Releases, attached hereto as Exhibits A and B, are a material part of this Settlement Agreement and are hereby incorporated as if fully set forth in the Settlement Agreement; if these Releases, attached hereto as Exhibits A and B, are not finally approved by the Court, or the Settlement Agreement cannot become effective for any reason and the Settlement set forth in this Settlement Agreement shall terminate as provided in Sections IVC.8-10. of this Settlement Agreement, then the Named Plaintiff Releases and Class Member Releases shall terminate nunc pro tunc and be of no force and effect.
F. Any Class Member who does not execute and timely deliver a Class Member Release, and any Named Plaintiff who does not execute and timely delivery a

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Named Plaintiff or Class Member Release, as appropriate, shall be ineligible for, and forever barred from receiving, monetary relief under this Settlement Agreement, even if said Class Member or Named Plaintiff has not opted out.
G. Class Members who neither timely opt out nor timely file a Claim Form shall, upon the Effective Date, be ineligible to receive any monetary award pursuant to this Settlement Agreement and be deemed to have fully, finally and irrevocably waived, released and discharged Morgan Stanley from any and all claims of sex discrimination, whether known or unknown, actual or potential, from August 5, 2003 to _ _ __
[DATE OF PRELIMINARY APPROVALl
VI. NO ADMISSION, NO DETERMINATION A. This Settlement Agreement does not, and is not intended to constitute, nor
shall it be deemed to constitute, an admission by any party as to the merits, validity or accuracy of any of the allegations, claims or defenses of any party in this case. The Class Members continue to assert the merits and validity of their claims under Title VII or parallel state and local laws prohibiting sex discrimination. By entering into this Agreement, Morgan Stanley does not admit or concede, expressly or impliedly, but denies that it has in any way violated Title VII, parallel state and local laws prohibiting sex discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Neither the Court nor any other court has made any findings or expressed any opinion concerning the merits, validity or accuracy of any of the allegations, claims or defenses in this case.

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B. Nothing in this Settlement Agreement, nor any action taken in implementation thereof, nor any statements, discussions or communications, nor any materials prepared, exchanged, issued or used during the course of the mediation or negotiations leading to this Settlement Agreement, is intended by the parties to, nor shall any of the foregoing constitute, be introduced, be used or be admissible in any way in this case or any other judicial, arbitral, administrative, investigative or other proceeding of whatsoever kind or nature (including, without limitation, the results of the Claims Process established under this Settlement Agreement) as evidence of discrimination, retaliation or sexual harassment or as evidence of any violation of Title VII, parallel state and local laws prohibiting sex discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Notwithstanding the foregoing, this Settlement Agreement may be used in any proceeding in the Court or in mediation or arbitration to enforce or implement any provision of this Settlement Agreement or implement any orders or judgments of the Court entered into in connection herewith.
VII. PROGRAMMATIC RELIEF A. Communications. MS-GWMG shall distribute its Non-Discrimination and
Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and then on an annual basis via email from Morgan Stanley's CEO. Employees shall be required to submit an acknowledgment of receipt.
In addition, the President and COO ofMS-GWMG shall issue a separate statement III support of the Policy and its underlying tenets. The Policy will be available on the

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Firm's intranet site and will be incorporated into various other Firm policies including its Code of Conduct and its Internet and Electronic Communications Usage Policy.
The Non-Discrimination and Anti-Harassment Policy and the behaviors it seeks to promote and prevent shall be the subject of a mandatory training that all employees will be required to complete upon hire.
B. Branch ManagementlMobility. Pursuant to the Mobility Project agreed to by the parties and announced in 2005, all available management positions will be posted on MS-GWMG's Internal Job Bank. These positions currently are titled: Branch Manager; Financial Advisor in Charge; Sales Manager; and Assistant Branch Manager. Minimum requirements for qualification for a management position are available on MS-GWMG's internal job bank. All positions will be posted for a minimum of five (5) business days. Either the hiring manager or Human Resources will follow up with each applicant/candidate in a timely manner.
As agreed to by the parties, MS-GWMG's Learning and Development department shall develop and implement a comprehensive management assessment and development program. The program will provide candidates with a formal and transparent path to assessment and selection as branch managers, and provide field management with an established and tested protocol for selection of high-potential candidates by trained assessors.
MS-GWMG shall provide all management-level field personnel with diversity training no less than every other year. The format of such training may vary from jurisdiction to jurisdiction depending on the relevant legal requirements. However, all managers shall, at a minimum, be required to complete an interactive, customized, e-

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learning training program. The positions to be trained are: Division Directors, Associate Division Directors, District Managers, Non-Producing and Producing Branch Managers, Financial Advisors in Charge, Risk Managers, Assistant Branch Managers, Sales Managers, and Service Managers.
Branch Manager compensation shall have a diversity component designed to measure and reward efforts at recruiting, training, and retaining women Financial Advisors.
C. Account Distribution 1. Since 2002, MS-GWMG has utilized a "Power Ranking" system to
rank Financial Advisors on performance factors to determine the distribution of the accounts of departing Financial Advisors. Under this Settlement, MS-GWMG has agreed to make significant changes to the Power Ranking system, including reducing reliance on historical factors and more heavily weighting criteria which reflect recent performance. MS-GWMG has also agreed to automate the account distribution process based on the revised Power Rankings and to limit the exceptions that can be made to the Power Rankings. The revised Power Ranking factors are set forth in Appendix 2 filed under seal along with this Settlement Agreement.
2. Power Rankings a. All Power Ranking factors that measure performance from
the preVIOUS twelve-month period will be adjusted to encompass a 12 month period exclusive of absence for parental leave or short-term disability leave. For example, if a Financial Advisor was on a leave of absence for four of the preceding twelve months, the

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previous 12 months measure will instead count the last twelve months that the employee was active.
b. The methodology for calculating the Power Rankings will be provided to each Financial Advisor, including the name of each factor, an explanation of each factor, and how each factor is weighted. Upon hire, each Financial Advisor will be individually provided with the methodology of the objective measures utilized in the Power Ranking calculation and the manner in which calculations are completed and this will be available to all Financial Advisors electronically. MS-GWMG agrees to provide notice to Financial Advisors regarding any modification to the Power Ranking methodology.
c. MS-GWMG shall inform each Financial Advisor of her or his individual ranking at the time any distribution is made. The actual distribution of a departing Financial Advisor's book will be made available to a Financial Advisor in the Branch confidentially upon request, and such communication shall include the rankings and (without identification of any particular Financial Advisor by name) the number of accounts and the assets distributed to each ranked Financial Advisor.
d. Review of Account Distributions. After a full calendar year has passed following implementation of these new Power Ranking criteria, the Industrial Psychologists to be appointed as set forth in Section VII.F.2. below will review how the process has been operating, including reviewing a representative sample of actual distributions and all exceptions and complaints. The Industrial Psychologists shall provide the Diversity Monitor with their findings of deviations from the account distribution system. If necessary, Lead Class Counsel and counsel for Morgan Stanley will reconvene

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to discuss the findings of the Industrial Psychologists and whether further appropriate changes to the Power Ranking criteria or distribution process should be made. The only changes to be made to the Power Ranking criteria are those agreed to by Lead Class Counsel and counsel for Morgan Stanley. If the parties are unable to come to agreement on any proposed changes, no changes will be made to the Power Ranking criteria.
3. Account Distribution Policies a. MS-GWMG senior management will issue a comprehensive
account distribution policy statement, which shall include policies covering the distribution of the accounts of departing Financial Advisors, retiring Financial Advisors, departing partners, and leads, call-ins, and walk-ins. The statement shall be issued via email to all field employees and shall be posted on MS-GWMG's intranet site and shall include a prohibition on discrimination. In addition, MS-GWMG will train all current Branch Managers on account distribution policies and procedures at the time the settlement becomes effective, and will similarly train all new managers that are subsequently hired.
b. Financial Advisors are not eligible for account distributions if they are: (1) currently on heightened supervision; (2) subject to any regulatory action reportable as a 'yes' answer on Form U-4 questions 14C-G; (3) subject to discipline reported on Form RE-3 in the last 12 months; or (4) subject to any written performance or workplace conduct warning in the last 90 days. Lateral recruits to MS-GWMG will be ineligible for account distributions during their first 12 months of employment with MSGWMG. New hire Financial Advisor Trainees are ineligible until they have successfully satisfied the preliminary production thresholds established under the Training Program. Financial Advisors who are on parental or short-term disability leave at the time an account

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distribution is made will participate as if they were not on leave, and the distributed accounts will be handled in the same manner as their other accounts are handled while on leave.
c. Where an exception is made to the Power Ranking process because of client choice or business exigency (such as client service needs), each individual exception shall be approved by the Complex or District Manager or his/her designee in writing, including the legitimate business reasons for the exception. Records of all such exceptions shall be kept for purposes of monitoring policy compliance. In addition, except for a lateral recruit who receives a distribution in his or her first 12 months of employment because of business exigencies, the Financial Advisor receiving a distribution through an exception will be disqualified from receiving other distributions of approximately equal asset value in the same or subsequent distributions. An individual Financial Advisor who does not receive a specific distribution as a result of an exception shall receive additional accounts in the same or subsequent distributions of approximately equal asset value.
d. MS-GWMG shall enhance its technology to allow its account distribution process to be computer automated, subject to branch manager review to ensure compliance with regulatory requirements. Account distributions will be made through this automated process, subject to exceptions described in Section VII.C.3.c. above. The results of all account distributions shall be stored and readily retrievable for monitoring to ensure compliance with account distribution policies.

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4. Retiring Financial Advisors a. The book of business formerly serviced by the retiring
Financial Advisor will be distributed through the Power Ranking system set forth in Sections VII.C.l. and VII.C.2 above unless a Joint Production Arrangement/Agreement (JPA) has been in effect for twenty-four (24) months or longer at the time of retirement.
b. The Industrial Psychologists shall make recommendations for increasing participation of women in the receipt of retiring Financial Advisor's books of business. These recommendations shall be made in accordance with Section VII.F.2. below.
5. Partnerships a. Unless a Joint Production Arrangement/Agreement (JPA)
has been in effect for twenty-four (24) months or longer at the time of departure, the book of business formerly serviced by the departing Financial Advisor will be distributed through the Power Ranking system.
b. The Industrial Psychologists shall make recommendations for increasing participation of women in the partnerships. These recommendations shall be made in accordance with Section VII.F.2. below.
c. For purposes of a Financial Advisor's Power Rankings, MSGWMG will count partnership assets under management based on the percentage of the commission split specified in the partnership agreement.
6. Leads, Call-ins, and Walk-ins a. Each Branch Office shall implement a "Financial Advisor of
the Day" program. Pursuant to this program, all client prospects who either walk in or

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telephone the branch and who are seeking a Financial Advisor shall be directed to the Financial Advisor serving as the Financial Advisor of the Day. The daily assignments shall be made alphabetically and announced on a monthly basis on or before the last day of the preceding month. The monthly roster shall be openly posted in a conspicuous location within the branch where all other Firm policies are posted. Participation among eligible Financial Advisors shall be voluntary each month.
b. Each Financial Advisor of the Day shall complete a "Financial Advisor of the Day Activity Log" that will detail all telephone calls and walk-in prospects fielded by the Financial Advisor and the disposition of each. The logs shall be maintained in a Branch Financial Advisor of the Day file for a three-year period.
c. If a prospect insists on speaking to the Branch Manager, the Branch Manager will direct the individual to the Financial Advisor of the Day. If the Financial Advisor of the Day is not qualified to handle the prospect's account, the Branch Manager shall ask the prospective client to interview a diverse slate of Financial Advisors, to the extent available.
d. All Financial Advisors and Registered Financial Advisor Trainees who have successfully satisfied the preliminary production thresholds established under the Training Program shall be eligible to participate.
e. Unauthorized failure to perform Financial Advisor of the Day obligations as designated shall render a Financial Advisor ineligible to participate in the Program for a period of six (6) months. The branch shall maintain a list of those Financial Advisors who elected not to participate or who otherwise were ineligible.

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7. Distribution Upon Transfer to Non-Producing Manager Where no JPA has been in existence for at least 24 months at the time of transfer, the book of business serviced by a producing manager who is transferred to a nonproducing branch manager position or a Financial Advisor who moves to a non-producing sales manager position will be distributed through the Power Ranking system as set forth in Sections VII.C.1-5 above.
8. Disputes Concerning Account Distributions The parties agree that if at any time during the term of this Settlement Agreement a dispute shall arise between MS-GWMG and a Financial Advisor or a Registered Financial Advisor Trainee concerning any account distribution, such dispute shall initially go through the MS-GWMG's internal complaint process which includes access to mediation under Morgan Stanley's alternative dispute resolution mechanism ("CARE"). However, nothing herein shall prevent any Class Member or Named Plaintiff from individually pursuing any legal claim not released under this Settlement through any applicable governmental agency or court of law if she is otherwise entitled to do so. D. Development Opportunities. MS-GWMG shall work with the jointly appointed Industrial Psychologists to develop workplace initiatives designed to attract women to MS-GWMG as Financial Advisors, and to retain them and enhance their success, including targeted mentoring and training. Training and mentoring may include but is not limited to training conference calls, online courses, and in person seminars. The Industrial Psychologists shall make recommendations for increasing participation of women Financial Advisors and Registered Financial Advisor Trainees in development

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opportunities. These recommendations will be made in accordance with Section VII.F.2. below.
MS-GWMG agrees to maintain its commitment to the biannual Women's Business Exchange. In addition, the biannual Financial Advisor conference will be preceded by a Women's Management Forum.
E. Complaint Process and Training. The complaint process, including MSGWMG's prohibition against retaliation, as provided in the Non-Discrimination and AntiHarassment Policy, shall be communicated in writing to all Financial Advisors and Financial Advisor trainees upon hire, and annually to all Financial Advisors. New hires shall be required to submit an acknowledgment of receipt of this communication.
MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding compliance with state, federal, and local EEO laws; MS-GWMG's anti-discrimination and harassment policies; and this Settlement Agreement.
MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding best practices for complaint investigation and resolution. Human Resources will be trained to treat all complaints or inquiries as confidentially as legally possible and to carry out their duties in a manner consistent with the law. In addition, Human Resources will implement controls designed to ensure that only non-complaining employees or managers with a need-to-know will be advised of a complaint or investigation. In all instances, upon being informed of a complaint or investigation, the non-complaining employees and managers so informed will be reminded ofMS-GWMG's policy against retaliation.

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MS-GWMG will retain documents sufficient to show complaints of sex discrimination, sex bias, and/or retaliation related to such complaints for the term of the Settlement Agreement.
F. Appointments. 1. Diversity Monitor. The parties shall jointly appoint a Diversity
Monitor. The Diversity Monitor shall be external to and independent of the MS-GWMG, but will report directly to the COO and President of MS-GWMG. She or he shall monitor MS-GWMG's efforts to carry out the terms of the Settlement Agreement. This shall include the following:
a. The Diversity Monitor will receIve monthly reports regarding complaints of women Financial Advisors and Registered Financial Advisor Trainees alleging sex discrimination and resolution of investigations of such complaints through the CARE program or otherwise.
b. The Diversity Monitor will reVIew quarterly reports regarding the branches in which Branch Managers have filed exception reports reflecting a deviation from the account distribution process.
c. The Diversity Monitor will review account distribution data, exception reports and complaints to monitor policy compliance. If the Diversity Monitor identifies issues of potential non-compliance, the Diversity Monitor will inform MSGWMG and Lead Class Counsel. After consultation with Lead Class Counsel, MSGWMG will take appropriate corrective actions to address instances of non-compliance. MS-GWMG shall inform the Diversity Monitor and Lead Class Counsel of any such corrective action taken. Where potential non-compliance has been identified, the Diversity

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Monitor shall have the right to audit the activities in a branch, by reviewing documents,

asking branch management to provide explanations and, if necessary, speaking to Financial

Advisors in the branch. Nothing herein shall alter or restrict Lead Class Counsel's right to

enforce this Settlement Agreement under the Dispute Resolution provisions of this

Settlement Agreement.

d. The Diversity Monitor will monitor bi-annual training of

management on EEO policies, and policies against discrimination and retaliation, and

ensure that the training agreed to was implemented.

e. The Diversity Monitor will review how Human Resources

handles investigations and resolution process for inquiries and complaints.

f.

The Diversity Monitor will provide reports to Lead Class

Counsel and MS-GWMG at least semi-annually regarding the items monitored, including

the analysis of the account distribution system. The Diversity Monitor may report incidents

of potential material non-compliance with this Settlement Agreement to Lead Class

Counsel and MS-GWMG on a more frequent basis.

g. The Diversity Monitor will maintain records for the term of

this Settlement Agreement.

2. Industrial Psychologists

a. The parties shall jointly appoint Industrial Psychologists Dr.

Kathleen Lundquist and Dr. Irwin Goldstein, who shall work with MS-GWMG and Class

Counsel to develop innovative, meaningful, novel, state of the art programs and to make

recommendations:

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• Concerning policies and programs designed to recruit women Financial Advisors and Financial Advisor Trainees to MS-GWMG;
29

• For increasing participation of women Financial Advisors In the receipt of retiring Financial Advisors' books of business;
• For increasing participation of women Financial Advisors In partnerships;
• Concerning policies and practices with respect to traInIng, development, and mentoring, that will enhance opportunities for women Financial Advisors and Financial Advisor Trainees. Training and development may include but is not limited to training conference calls, online courses, and in-person seminars;
• Concerning a mentoring program for all Financial Advisor Trainees and Financial Advisors; and
• Concerning a system of semi-annual internal data collection and a monitoring process. b. The Industrial Psychologists shall present such
recommendations to a senior executive panel of MS-GWMG consisting of: the Senior
Learning & Development officer; the Senior Diversity officer; the Senior Employment
Attorney; the senior Human Resources officer; and a representative from National Sales
Management. A copy of the recommendations will also be provided to Lead Class
Counsel. If MS-GWMG does not agree with the recommendations, but Lead Class
Counsel still thinks they should be implemented notwithstanding MS-GWMG's
objections, the Industrial Psychologists, along with Lead Class Counsel, will have the
opportunity to present the recommendations to the COO and President of MS-GWMG or
the then Head of National Sales for MS-GWMG. All recommendations of the Industrial
Psychologists will be designed to advance the purposes of this Settlement Agreement
consistent with MS-GWMG s business needs and objectives.
c. The Industrial Psychologists shall provide the Diversity
Monitor with their findings of deviations from the account distribution system.

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d. Subject to signing an appropriate confidentiality agreement, and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists described in Sections VII.F.1. and VII.F.2. above will have reasonable access to relevant documents, data, and MS-GWMG employees. The Diversity Monitor and the Industrial Psychologists will be compensated by MS-GWMG.
3. If it becomes necessary to replace the Diversity Monitor or either Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement.
G. General Non-Discrimination Provisions. Pursuant to MS-GWMG's NonDiscrimination and Anti-Harassment Policy, women Financial Advisors and Registered Financial Advisor Trainees will enjoy terms and conditions of employment comparable to their male counterparts.
MS-GWMG shall assert the following general policies using a method agreed to by the parties:
1. Prohibition against discrimination on the basis of sex III compensation and business opportunity allocations.
2. Prohibition against retaliation for reporting sex discrimination, participating in the CARE program, participating in this or any discrimination settlement, filing a lawsuit or complaint with any outside agency or entity alleging sex discrimination, or for refusing to participate in sex discrimination.
3. MS-GWMG will not honor business expenses that are directly or indirectly related to male-only entertainment establishments.
4. The parties agree that it shall be a violation of this Settlement Agreement for a Morgan Stanley supervisor to retaliate against any Class Member for her

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participation in the prosecution of the allegations contained in the charges underlying this Settlement or in the Settlement itself. However, nothing in this Settlement will prevent a Class Member from pursuing whatever legal rights or remedies she otherwise may have with respect to any individual claim not covered by the claims released through this Settlement.
VIII. MONETARY RELIEF A. Settlement Fund. No later than ten (10) days after Preliminary Approval
of this Settlement Agreement, Morgan Stanley shall pay by wire transfer to the Depository Bank the sum of Forty-Six Million Dollars ($46,000,000). The $46 million will be placed in an interest-bearing account titled in the name of MS-GWMG Financial Advisor Sex Discrimination Settlement Fund, a Qualified Settlement Fund organized and existing under the laws of the District of Columbia, intended by the parties to be a "Qualified Settlement Fund" as described in Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-l, et seq. This payment is made in order to satisfy the claims of all Named Plaintiffs and Class Members, as well as for other purposes identified in this paragraph. The monies so transferred, together with interest subsequently earned thereon, shall constitute the Settlement Fund. The $46 million transferred into the Settlement Fund by Morgan Stanley shall, with the additional Employer Payroll Tax Payment described below, constitute the total Settlement cash outlay by Morgan Stanley in connection with: (1) the resolution of this matter; (2) this Settlement Agreement (and attachments); and (3) the dismissal of this Action. Except as provided in Section VIII.F.2. (i.e., employment taxes), this sum is inclusive of payment for: (a) all amounts paid to Class Members, including Named Plaintiffs, which are to be distributed pursuant to Section

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VIII.D. below; (b) all attorneys' fees and costs awarded by the Court, including those in connection with securing court approval of the Settlement, the claims process and monitoring the Settlement Agreement, other than fees and costs awarded in connection with any successful proceeding to enforce the terms of this Settlement Agreement; and (c) all costs in connection with the Settlement Fund including, but not limited to, those related to notice, claims processing, legal advice relating to the establishment of the Qualified Settlement Fund and tax treatment and tax reporting of awards to claimants, preparation of tax returns (and the taxes associated with such tax returns as defined below), and the Special Master's fees and expenses; and (d) applicable federal, state and local income taxes, and all federal and state unemployment taxes required to be withheld and/or paid by Morgan Stanley. However, the $46 million payment to the Settlement Fund does not include Morgan Stanley's share of taxes or contributions (i. e., FICA, FUTA, SUTA and Medicare) which will be paid separately by Morgan Stanley to the Claims Administrator. Morgan Stanley shall, upon notice from the Claims Administrator as required in Section VIII.F.2. below, remit any required tax payment to the Claims Administrator-.-. Nothing in the foregoing provisions of this Section, however, shall release MS-GWMG from expending the resources required to fulfill its responsibilities under this Settlement Agreement.
B. Administration by Trustee. The Claims Administrator shall serve as Trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling, management and distribution of the Settlement Fund. The Claims Administrator shall act in a manner necessary to qualify the Settlement Fund as a "Qualified Settlement Fund"

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under Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B-l, et seq., and to maintain that qualification.
C. Claims Filing Procedures for Settlement of Claims of Named Plaintiffs and Class Members. Class Members shall be entitled to submit their Claim Forms to the Special Master in accordance with the procedures set forth on the Claim Form. Any Class Member who previously released claims which would otherwise be covered by this Settlement Agreement, or who obtained a final judicial determination concerning claims that would otherwise be covered by this Settlement Agreement, is not eligible to receive a monetary award for those claims.
In order to be eligible for an award from the Settlement Fund, Class Members, including Named Plaintiffs, must submit a Claim Form which must be postmarked or actually received by the date established by the Court. The Claim Form shall be completed in its entirety to the extent applicable, including the survey of information to identify, among other things, individual evidence of alleged sex discrimination.
The Claims Administrator will provide counsel for Morgan Stanley and MSGWMG's payroll department with the names and social security numbers of Class Members who submitted Claim Forms ("Claimants"). The identity of the Claimants will not be disclosed to anyone else at MS-GWMG.
After receiving the Claimant information discussed in the paragraph above, Morgan Stanley, through its counsel, will provide the Claims Administrator with the dates each Claimant was employed in the MS-GWMG as a Financial Advisor and/or Registered Financial Advisor Trainee and earnings information for those Claimants. The Claims Administrator will provide that information to each Claimant. To the extent there is any

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disagreement relating to the accuracy of the information provided to the Claimants, the disagreement shall be resolved by the Special Master. The Special Master shall provide any corrected data to Plaintiffs' experts.
D. Allocation Formula. Class Members who submit a Claim Form will be eligible to receive monies based on a formula (the "Allocation Formula") which will have two components: (1) an Earnings Regression Component developed by Class Counsel's statistical experts and (2) a Claim Form Survey Component to be determined by a jointly selected Special Master. Fifty percent (50%) of the formula will be allocated to each of these two components.
1. Earnings Regression Component. A Financial Advisor Class Member, including a Named Plaintiff, whose annual earnings in any year during the liability period fall below an annual earnings curve for male Financial Advisors (i.e., two standard deviations above the mean earnings curve for male Financial Advisors controlling for registration date and branch/office location), shall be eligible to receive a monetary award from the earnings regression component which shall take into account the Claimant's earnings during the liability period, and shall control for the following variables: a) the Claimant's length of tenure at MS-GWMG as a Financial Advisor; b) the Claimant's registration date; and c) the Claimant's branch office location. A separate, comparable earnings regression model will be conducted with respect to Registered Financial Advisor Trainees. The earnings regression component will be developed by Class Counsel's expert with input from MS-GWMG.
2. Claim Form Survey Component. The Special Master shall make allocations under the Claim Form survey component by taking into consideration: (1)

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information provided by Class Counsel and information contained in the Claim Form submitted to the Special Master concerning the Claimant's (i) individual contribution to the prosecution of this action; (ii) individual evidence of alleged sex discrimination presented on the Claimant's Claim Form; (iii) individual evidence supporting an award of compensatory damages; and (2) the release of individual claims that were filed in an EEOC charge on or before December 31, 2006 and that go beyond the scope of the settled class claims. Based on information provided by MS-GWMG, the Special Master may modify allocations to be made under the Allocation Formula based on any data or information specific to the Claimant's branch/office, including information regarding persons who previously signed a release that covered sex discrimination claims. Subject to Court approval, the Special Master will have sole and final authority as to the final distribution.
3. Special Master Authority to Determine Award Eligibility. a. Within a reasonable time period after the date specified for
receipt of the Claim Forms, the Special Master shall render a determination as to the monetary award, if any, that should be paid to each Claimant from the Settlement Fund.
b. The total amount of such awards shall not exceed the net amount of the Settlement Fund after all costs and Class Counsel's attorney's fees, as discussed in Section VIlLA. above, are considered.
c. The Special Master, after determining the proposed allocation formula, will submit the proposed allocation formula and distribution plan to the Court under seal for in camera review and approval, with copies to Lead Class Counsel. If there is no objection or suggested modification by the Court within thirty (30) days following submission to the Court, the allocation formula and distribution plan shall be

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deemed approved, and the Special Master shall submit the distribution plan to the Claims Administrator to send the Notices of Awards to the eligible Claimants.
d. Following approval by the Court, the Claims Administrator shall send a Notice of Award to each eligible Claimant, along with a Named Plaintiff Release or a Class Member Release, whichever is applicable. Within a reasonable time period after receipt of an executed Named Plaintiff Release or Class Member Release from a Named Plaintiff or an executed Class Member Release from a Class Member, the Claims Administrator shall send the Named Plaintiff or Class Member her award payment. Any Named Plaintiff who does not execute and timely deliver an executed Named Plaintiff or Class Member Release, and any Class Member who does not execute and timely deliver an executed Class Member Release to the Claims Administrator within six (6) months of the date the Notice of Award was mailed to her shall be ineligible for, and forever barred from receiving, monetary relief under this Settlement Agreement, even if said Named Plaintiff or Class Member has not opted out. Any undistributed funds that remain after six (6) months from the mailing of the Notice of Award due to unsubmitted releases shall be distributed to 501 (c)(3) organizations advancing opportunities for women, including opportunities in the financial services industry, as jointly selected by Lead Class Counsel and MS-GWMG.
e. The Special Master shall maintain the distribution plan and allocation list for a period of five (5) years. Morgan Stanley shall have access to individual allocation amounts only upon written notice to Class Counsel and a showing of good cause (e.g., actual or threatened litigation by a Claimant). Any dispute as to whether good cause

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exists for such a requested disclosure shall be resolved through the Dispute Resolution process set forth in this Settlement Agreement.
4. Confidentiality Regarding Amount of Monetary Award. All Claimants receiving monetary awards will be required to keep the amount of their award confidential.
E. Non-Admissibility of Fact of Award (or Non-Award). Except to the extent that it would constitute a set off in an action for damages claimed for any period covered by this settlement, neither the fact nor amount of an award, nor the fact of any non-award, shall be admissible in any other proceeding for any purpose other than to enforce a Named Plaintiff Release or a Class Member Release executed in accordance with this claims process, nor shall it be deemed to be a finding as to the merits of any claim.
F. Tax Treatment 1. Qualified Tax Status and Tax Responsibilities. The Settlement
Fund shall be established as a Qualified Settlement Fund within the meaning of Section 468B of the Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.468B1, et seq., and shall be administered by the Claims Administrator under the Court's supervision. The parties shall cooperate to ensure such treatment and shall not take a position in any filing or before any tax authority inconsistent with such treatment.
2. Payment of Federal, State and Local Taxes. The parties recognize that the awards to eligible Claimants will be subject to applicable tax withholding and reporting, which will be handled as follows: The Claims Administrator shall serve as trustee of the Settlement Fund and shall act as a fiduciary with respect to the handling, management, and distribution of the Settlement, including the handling of tax-related

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Issues and payments. Specifically, the Claims Administrator shall be responsible for withholding, remitting and reporting of the Claimant's share of the payroll taxes from the Settlement Fund, and Morgan Stanley shall be responsible for the employer's share of payroll taxes as set forth in this section.
The Special Master will establish, for tax purposes, the allocation of the payments made to Claimants to wages, interest, compensatory damages, or such other tax character of such payout as the Special Master may determine, based on the principles set forth in Treas. Reg. §1.468B-4 by reference to the claims pursuant to which distributions are made and as if Morgan Stanley made such payments directly to Claimants.
The Claims Administrator shall inform Morgan Stanley in writing of the employer's share of all taxes or contributions (i.e., FICA, FUTA, SUTA, and Medicare) required to be paid by Morgan Stanley. Morgan Stanley shall, within ten (10) business days of such notice, remit all such payments (net of the credit for opt outs, if any, as provided for in Section IVC.9. above) to the Claims Administrator for payment to appropriate taxing authorities ("Employer Payroll Tax Payment").
The Claims Administrator shall be responsible for the timely reporting and remitting of the Employer Payroll Tax Payment to the appropriate taxing authorities and shall indemnify Morgan Stanley for any penalty arising out of an incorrect calculation and/or interest with respect to late deposit of the same. Subject to the Claims Administrator's obligation to comply with applicable laws, the parties anticipate that any amounts designated as interest shall not be subject to withholding and shall be reported, if required, to the IRS on Form 1099-INT. The amounts paid for emotional distress shall not be subject to withholding and shall be reported to the IRS on Form 1099-MISC.

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Except with respect to the Employer Payroll Tax Payment, the Claims Administrator shall be responsible to satisfy from the Settlement Fund any and all federal, state and local employment and withholding taxes, including, without limitation, federal and state income tax withholding, FICA, FUTA, SUTA, Medicare and any state employment taxes. The Claims Administrator shall satisfy all federal, state, local, and other reporting requirements (including any applicable reporting with respect to attorneys' fees and other costs subject to reporting), and any and all taxes, penalties and other obligations with respect to the payments or distributions from the Settlement Fund not otherwise addressed herein.
The Claims Administrator shall be responsible for procuring an executed Named Plaintiff or Class Member Release and Form W-9 from each Named Plaintiff prior to making any monetary allocations to such Named Plaintiff. The Claims Administrator shall be responsible for procuring an executed Class Member Release and Form W-9 from each eligible Claimant who is not a Named Plaintiff prior to making any monetary allocations to such Claimant.
All (i) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund, including any taxes or tax detriments that may be imposed on Morgan Stanley with respect to income earned for any period during which the Settlement Fund does not qualify as a "Qualified Settlement Fund" for federal and state income tax purposes (hereinafter "Settlement Fund Taxes"), and (ii) expenses and costs incurred in connection with the operation and implementation of this paragraph (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to

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file) any returns described herein or otherwise required to be filed pursuant to applicable authorities) (hereinafter "Settlement Fund Tax Expenses"), shall be paid out of the Settlement Fund. Further, Settlement Fund Taxes and Settlement Fund Tax Expenses shall be treated as a cost of the administration of the Settlement Fund. The parties hereto agree to cooperate with the Claims Administrator, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions set forth in this paragraph.
G. Morgan Stanley Has No Further Obligation, Liability or Responsibility. Other than Morgan Stanley's responsibility for the employer's share of payroll taxes as discussed in Section VIII.F.2. above, Morgan Stanley shall have no withholding, reporting or any other tax reporting or payment responsibilities with regard to the Settlement Fund or its distribution to Class Members. Moreover, Morgan Stanley shall have no liability, obligation, or responsibility for the administration of the Settlement Fund, the determination of any formulas for disbursement, or the disbursement of any monies from the Settlement Fund except for (1) its obligation to pay the settlement amount of$46 million no later than ten (10) days after preliminary approval of this Agreement; (2) its obligation related to the Employer Payroll Tax Payment as set forth in Section VIII.F.2.; and (3) its agreement to cooperate in providing information which is necessary for Settlement administration set forth herein.
H. The parties anticipate that, as a result of actions to be taken by MS-GWMG pursuant to the Settlement, the earnings of women Financial Advisors will increase over the period of the Settlement Agreement by at least $16 million.

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I. The parties anticipate that MS-GWMG will spend approximately $7.5 million on diversity efforts during the period of this Settlement Agreement, including programs for training, re-education, and other development programs for women Financial Advisors and Registered Financial Advisor Trainees. This includes costs associated with settlement compliance, such as costs for the retention of the Industrial Psychologists, compensation for the Diversity Monitor, compensation and all expenses for employees who will be working on the diversity programs, and the costs associated with the Women's Business Exchange and other training and development programs for women Financial Advisors and Registered Financial Advisor Trainees.
IX. MONITORING A. Data Collection. MS-GWMG will collect data which will include, but not
be limited to: (1) compensation of Financial Advisors; (2) account distributions, defined to include all transfers of accounts from one Financial Advisor to another within MS-GWMG such as those of retiring and deceased Financial Advisors, not just the distribution of the accounts of departing Financial Advisor; (3) partnerships between active Financial Advisors or partnerships between active and retiring Financial Advisors; and (4) any other areas agreed upon by MS-GWMG and Lead Class Counsel. MS-GWMG will include several variables in its data collection, including but not limited to, gender, production and length of experience.
B. Monitoring System. MS-GWMG, with input from the Industrial Psychologists and consent from Lead Class Counsel, will create and implement a system of monitoring compliance with each policy described herein, including, without limitation, the account distribution policy using the Power Ranking methodology.

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C. Reports. Lead Class Counsel will receive semi-annual reports from the Diversity Monitor.
D. Meetings. MS-GWMG and Lead Class Counsel will meet at least once every six (6) months regarding compliance, and may confer more frequently at their discretion or as dictated by information either side gathers.
X. ENFORCEMENT A. No Third Parties. Enforcement of this Settlement Agreement shall be
prosecuted by Lead Class Counselor counsel for Morgan Stanley only, not third parties. Lead Class Counsel shall meet and confer with counsel for Morgan Stanley prior to commencement of any enforcement proceedings.
B. Dispute Resolution. The parties will work diligently and in good faith to resolve all disputes that may arise during the term of this Settlement Agreement concerning the rights, obligations and duties of the parties to this Settlement Agreement. In the event the parties cannot agree, the parties will attempt to resolve the dispute with the facilitation of a mutually selected mediator. If mediation fails to resolve the dispute(s) at issue, the parties agree to submit the dispute(s) to binding resolution by a mutually appointed arbitrator.
XI. CONFIDENTIALITY A. Documents and Information Produced by Morgan Stanley and Class
Counsel. All proprietary and confidential documents or information that have previously been provided to either Morgan Stanley or Class Counsel as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provision of this Settlement Agreement shall, unless otherwise agreed, be

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treated as, and thereafter remain, confidential. Said documents and information shall not be disclosed to anyone other than the mediator, arbitrator or the Court in connection with any proceeding to enforce any provision of this Settlement Agreement. If such disclosure is deemed necessary by Class Counselor Morgan Stanley, Class Counselor the Company shall identify and disclose to the other party such documents and information deemed necessary to disclose at least ten (10) business days prior to filing such documents with the Court, and, if a party so requests, shall seek permission to file said documents with this Court under seal.
B. Return or Disposal of Confidential Documents and Information. All proprietary and confidential documents or information that have previously been provided to Class Counselor to Morgan Stanley as of the date this Settlement Agreement is executed, or which are produced by Morgan Stanley or Class Counsel pursuant to any provlSlon of this Settlement Agreement, shall be destroyed or returned to counsel as follows:
After the expiration of the five (5) year term of the Settlement all proprietary and confidential documents or information provided to Class Counselor Morgan Stanley and designated "Confidential for Settlement Purposes Only" or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the expiration of the five (5) year term of the Settlement. Certification of such destruction shall be provided to counsel for the producing party.

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The preceding paragraphs of this Section are intended to supersede those provisions of the "Confidentiality Agreement For Settlement Discussions" earlier executed by counsel for the parties that address the timing of the return or destruction of proprietary and confidential documents or information provided to Class Counselor Morgan Stanley. All other provisions of the "Confidentiality Agreement For Settlement Discussions" remain in full effect.
Nothing in the preceding paragraphs shall preclude any party from responding to a lawful discovery request, subpoena or court order; provided, however, that the party against whom such discovery is sought or such subpoena or order is directed agrees to provide immediate notice and a copy of same to counsel for the other parties to this Settlement Agreement.
In the event that this Settlement Agreement is terminated for any reason, all proprietary and confidential documents or information provided to Class Counselor Morgan Stanley and designated "Confidential for Settlement Purposes Only" or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the date on which this Settlement Agreement is terminated. Certification of such destruction shall be provided to counsel for the producing party. XII. ATTORNEYS' FEES AND EXPENSES OF CLASS COUNSEL.
As discussed above in Section VIlLA., all of Class Counsel's fees and costs, including those in connection with securing Court approval of this Settlement Agreement,

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the claims process and any monitoring of this Settlement Agreement, shall be paid from the Settlement Fund, following approval of those attorney's fees and costs by the Court.
XIII. GOVERNING LAW The parties agree that federal law shall govern the validity, construction and
enforcement of this Settlement Agreement. To the extent that it is determined that the validity, construction or enforcement of this Settlement Agreement or any Named Plaintiff Release or Class Member Release executed pursuant to its terms is governed by state law, the law of the District of Columbia shall apply.
This Settlement Agreement, including the Exhibits hereto, contains the entire agreement and understanding of the parties with respect to the Settlement. This Settlement Agreement does not impose any obligations on the parties beyond the terms and conditions stated herein. Accordingly, this Settlement Agreement shall not prevent or preclude MSGWMG from revising its employment practices and policies or taking other personnel actions during the term of this Settlement Agreement so long as they are consistent with this Settlement Agreement.
Except as specifically provided for herein, this Settlement Agreement may not be amended or modified except with the express written consent of the parties.
XIV. OTHER CONDITIONS OF SETTLEMENT A. Exhibits. The Exhibits to this Settlement Agreement are material and
integral parts hereof and are fully incorporated herein by this reference. B. Notices to Counsel. All notices to counsel required or desired to be given
under this Settlement Agreement shall be in writing and by overnight mail and e-mail to counsel for the respective parties (specifically, to Cyrus Mehri of Mehri & Skalet, PLLC,

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Steven M. Sprenger of Sprenger & Lang, PLLC, Alexa B. Pappas of Morgan Stanley, and Mark S. Dichter of Morgan, Lewis & Bockius LLP) at their respective addresses set forth below (or to such other address as any such party or counsel may designate in a notice). Notices sent to Alexa B. Pappas under this paragraph shall be addressed to Ms. Pappas at the following address: 2000 Westchester Avenue, Purchase, New York, 10577-2530.
C. Failure to Insist on Strict Compliance. The failure of any party to insist in anyone or more instances on strict compliance with the terms and conditions hereof shall not be construed to be a waiver of remedies available with respect to any prior or subsequent breach.
D. Settlement Agreement Binding. This Settlement Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, dependents, executors, administrators, trustees, legal representatives, personal representatives, agents, successors and assigns; provided, however, that this Settlement Agreements shall not inure to the benefit of any third party.
E. No Drafting Presumption. All parties hereto have participated, through their respective counsel, in the drafting of this Settlement Agreement and, therefore, this Settlement Agreement shall not be construed more strictly against one party than another.
F. Dispute As To Meaning of Agreement Terms. In the event of any dispute or disagreement with respect to the meaning, effect or interpretation of this Settlement Agreement or any Exhibit hereto, or in the event of a claimed breach of the Settlement Agreement, the parties agree that such dispute will be resolved and adjudicated only in accordance with the dispute resolution provisions of Section X of this Settlement Agreement.

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G. Interpretation of Terms. Whenever possible, each provision and term of this Settlement Agreement shall be interpreted in such a manner as to be valid and enforceable.
H. Paragraph and Section Headings. Paragraph and section headings are for convemence of reference only and are not intended to create substantive rights or obligations.
I. Counterparts. This Settlement Agreement may be executed in counterparts. Each signed counterpart together with the others shall constitute the full Settlement Agreement.
J. Agreement Binding. As of the date on which counsel for the parties execute this Settlement Agreement, this Settlement Agreement will be binding in all respects, unless the Court fails to approve this Settlement Agreement and the Settlement Agreement is thus vacated.
[Remainder of this page intentionally left blank.]

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Steven M. Sprenger, Esq.

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SPRENGER + LANG, PLLC

Steven A. Skaiet, Esq.

Email: fi_~Q[~ng~1:@fipr~nggr.hJJlg,(Qm

Sandi Farrell, Esq.

1400 Eye Street, N.W. Suite 500

Lisa Bornstein, Esq.

Washington, DC 20005

MEHRI & SKALET, PLLC

Telephone: (202) 265-8010

1250 Connecticut Avenue, N.W. Suite 300

Facsimile: (202) 332-6652

Washington, DC 20036

Telephone: (202) 822-5100

Mara R. Thompson, Esq.

Facsimile: (202) 822·4997

SPRENGER I LANG, PLLC

Email: mJh.Q_mp~Qg@~m\;mg~IlmJK_~.QIU

Christopher Moody, Esq.

310 Fourth Avenue South, Suite 600

Email: mQQ.Qy~mt~l?.Qflgw.com

Minneapolis, MS 55415

Whitney Warner, Esq.

Telephone: (612) 871-8910

MOODY & WARNER, PC

Facsimile: (612) 871-9270

4169 Montgomery NE

Albuquerque, NM 87109

Telephone: (505) 944-0033

A.ttorney~Ior P{aintftJ's and the Class

73725

49

l-NY/2170287.2

DATED: April~ 2007
L~1~vc~~=-
Mark S. Dichter, Esq. Email: Jl1di@t~!:@morganlewi S.&Qlll MORGAN, LEWIS & BOCKlUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5299
Attorneysfor Defendant
Morgan Stllnley & Co. Incorporated,
formerly known as Morgan Stanley DW Inc.

73725

50

1·NYi21702872

 
 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

)

JOANNE AUGST-JOHNSON, NANCY )

REEVES, DEBRA SHAW, JAN TYLER, )

CHERYL GIUSTINIANO, LAURIE )

BLACKBURN, ERNA TARANTINO, )

and ELIZABETH REINKE,

)

)

Plaintiffs,

)

)

v.

)

)

MORGAN STANLEY & CO. INC., f/k/a )

MORGAN STANLEY DW INC.,

)

)

Defendant.

)

)

Civil Action No. 06-1142 (RWR)

FINAL ORDER CERTIFYING CLASS, APPROVING SETTLEMENT AGREEMENT,
APPROVING AWARD OF ATTORNEYS FEES AND COSTS, AND DISMISSING ACTION
SUBJECT TO THE COURT'S CONTINUING JURISDICTION ______________________________________________________________________________

After a hearing on July 5, 2007, at which the substance of the proposed settlement was

addressed, including the injunctive relief, the size of the proposed monetary award, the means of

determining an individual’s monetary award and the ability of any individual in the proposed

class to estimate her own award, an Order of Preliminary Approval was entered. The Order of

Preliminary Approval appointed the Class Representatives, appointed Class Counsel and Lead

Class Counsel, appointed a Special Master, approved the form and procedures for notifying the

Class, established deadlines for submitting objections and opting out of the case, enjoined

competing actions by Class Members who did not opt out, set a date for a final fairness hearing,

provisionally certified the Class and provisionally approved the Second Revised Settlement

-2Agreement (“Settlement Agreement”) filed in this case on July 17, 2007. Having considered the written submissions of the parties and all objections timely submitted by any Class Member, and having held a final fairness hearing, it is hereby ADJUDGED and ORDERED that:
1. This Court has jurisdiction over this lawsuit pursuant to 28 U.S.C. § 1331. 2. The proposed plaintiff Class, defined as “all women who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated (“Morgan Stanley”) or its predecessor(s) at any time from August 5, 2003 through June 30, 2007,” encompassed 2,867 potential Class Members, too many for joinder of all to be practicable. There are numerous factual and legal issues common to the Class, some of which are identified in paragraph 22 of the Amended Complaint. The claims of the Class Representatives are typical of the claims of other Class Members in that they arise from the same practices that give rise to the claims of the other Class Members. The Class Representatives were determined to be adequate representatives of the Class, see Preliminary Approval Order ¶ 5, and there is no evidence that Class Representatives have any interests antagonistic to those of the Class Members they represent. Accordingly, because the proposed Class meets the requirements of numerosity, commonality, typicality and adequacy, it is appropriate that this matter proceed as a class action. See Fed. R. Civ. P. 23(a). 3. The proposed Class satisfies both the requirements of Fed. R. Civ. P. 23(b)(2) and 23(b)(3) and is hereby certified as a hybrid (b)(2) and (b)(3) class. The Class Representatives allege that Morgan Stanley management adopted personnel policies and practices with respect to account distributions, compensation, promotions, mentoring, training, investigation of complaints, diversity training and terminations that have been generally applicable to this Class

-3of Financial Advisors and Registered Financial Advisor Trainees, making final injunctive relief appropriate with respect to the Class as a whole. The negotiated injunctive relief predominates in importance over monetary relief for the members of the Class, and a class action is superior to other methods available for the fair and efficient adjudication of the controversy. While common issues concerning the nature of the relevant Morgan Stanley personnel policies and practices and their impact on the Class Members predominate over solely individual issues affecting the claims of Class Members, including liability issues, each Class Member's damages could be substantially influenced by facts unique to an individual. Thus, it is appropriate to allow Class Members to opt-out to protect their rights and interests. At their request, thirty-one Class Members have been permitted to opt-out of the monetary portion of the Settlement Agreement without releasing any of their claims. See Appendix A to this Order.
4. In accordance with the procedures approved in the Preliminary Approval Order, the Class was provided with the Class Notice regarding the proposed Settlement Agreement and the deadlines and procedures for opting out or objecting. Over 99% of the Class appears to have received notice. Due to invalid addresses, not every Class Member received individual Notice, or individual Notice by the notification deadline set in the Preliminary Approval Order. However, notice was also published on three websites at www.morganstanleygendercase.com, www.sprengerlang.com (Sprenger & Lang, PLLC), and www.nmlaborlaw.com (Moody & Warner, P.C.). The proposed settlement was also publicly reported through newspaper reports and trade publications, including Bloomberg. Every request to opt out, timely or late, was granted, in part to ensure that late notice was not prejudicial. See Appendix A to this Order.

-4Only one Class Member submitted a timely objection contending that the Settlement Agreement was not fair, reasonable, and adequate for the Class Members.1
5. Notice was sent to the United States Attorney General and the Attorneys General of all 50 states and the District of Columbia on July 25, 2007. No objections were received from any federal or state officials.
6. This Order incorporates by reference the definitions and terms of the Settlement Agreement filed in this case on July 17, 2007. The Settlement Agreement, revised after court review and a hearing on July 5, 2007, was the culmination of nearly two years of discussion and negotiation between the parties. The discussions were informed by several months of prior investigation, including interviews with 200 Class Members. The settlement terms were negotiated at arms’ length with the assistance of an experienced, professional mediator.
7. In accord with the Settlement Agreement and compliance with Administrative Order No. 1 entered July 17, 2007, Morgan Stanley transferred $46 million on July 27, 2007 to the Settlement Fund.
8. A final fairness hearing was held, as noticed, on October 11, 2007, for the purpose of hearing and considering written objections previously submitted. The sole objector was permitted to appear, but did not. The grounds stated in her written objection fall into four general categories: (a) that the monetary relief is inadequate; (b) that the Class is too narrowly
1 Three other letters were received by the deadline. Two of them did not allege or articulate any basis on which to conclude that the Settlement Agreement is not fair, adequate or reasonable with respect to Class Members. The third letter was from a person who is not a Class Member and therefore is not entitled to comment or object. In addition, one objection dated and received in chambers after the date of the final fairness hearing acknowledged that it was untimely and was not served as required upon counsel in this action. That objection, thus, cannot be considered.

-5defined; (c) that the Notice was inadequate; and (d) that the injunctive relief is inadequate and discriminatory.2 The objection to the adequacy of the monetary awards reflects a misunderstanding of the potential size of an individual award and the means by which an individual’s award will be determined. It also attempts to measure the monetary award in this case against awards in cases that are not fairly comparable, and differ in critical ways as to facts, time periods, types and numbers of employees, claims, legal issues, and ease of proof. The objection that the Class should include management personnel does not take account of the fact that including management personnel would present possible conflicts of interest with Class Members. To the extent that the objection regarding the adequacy of the Notice to the Class has merit, the problem has been remedied by granting Class Members’ late requests to opt-out. The objector’s contention that none of the proposed injunctive relief was studied for possible unfair disparate impact upon African-American employees is countered by Morgan Stanley’s uncontradicted response that revised factors for account distributions were examined for such adverse impact and that no such adverse impact was shown. In any event, there has been no showing that this concern cannot be raised in the race discrimination actions pending against Morgan Stanley. Finally, contrary to the objector’s fear, the Settlement Agreement does not bar a Class Member from pursuing in court any legal claim not released under the Settlement Agreement if she is otherwise entitled to do so. These objections, considered in light of the responses submitted, do not demonstrate that the terms of the Settlement Agreement are not fair, adequate, or reasonable.
2 The portion of the objection that was submitted only to the court and not to counsel for the parties was not considered.

-69. Weighing the objections lodged, the responses to the objections, the matters discussed at the hearing held on July 5, 2007, and Class Counsel’s thoughtful and credible assessment that the monetary and injunctive terms of the Settlement Agreement are decidedly advantageous in light of the difficulty and costs of proof in this matter, establishes that the Settlement Agreement is fair, adequate and reasonable. 10. The proposed award of attorneys fees was set forth in the Settlement Agreement filed July 17, 2007, and the notices to Class Members and the 52 attorneys general. No timely objection was received to the attorneys fees or to the expenses subsequently detailed in the supporting justifications and sworn statements filed in this case on October 3, 2007. The proposed award of attorneys fees is within the range of attorneys fees awards made in comparable cases. The actual and estimated expenses are sufficiently documented and reasonable. 11. The Settlement Agreement is hereby approved and incorporated herein and shall become effective according to its terms when either the time for appeal has run without an appeal being filed or any appeal (including any requests for rehearing en banc, petitions for certiorari or appellate review) has been finally resolved. The award of attorneys fees and expenses as set forth in the Settlement Agreement is hereby approved. 12. This Order and the Settlement Agreement are binding on all members of the Class, other than those listed in Appendix A to this Order, except that Paragraph 13 below is binding on all Class Members, including those listed in Appendix A. The Class Members identified in Appendix A to this Order have submitted opt-out requests and have excluded themselves from the monetary relief provisions in the Settlement Agreement.

-713. Each member of the Settlement Class, including any member who makes an irrevocable election to exclude herself from the monetary relief provisions of the Settlement Class, is permanently enjoined from commencing, prosecuting or maintaining in any court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of this Court in connection with the Settlement Agreement. Each member of the Settlement Class except for those Class Members listed in Appendix A is permanently enjoined from commencing, prosecuting or maintaining, either directly, representatively or in any capacity, any claim that is subsumed within the Settlement Agreement including any and all sex discrimination claims against Morgan Stanley under federal, state and local laws, including claims related to sexual harassment and termination of employment, through June 30, 2007. 14. Individual Class Members’monetary awards shall be determined in accord with the procedures set forth in the Settlement Agreement, and the Settlement Fund shall be allocated in accord with Administrative Order No. 2, which accompanies this Order. 15. The Amended Complaint shall automatically be dismissed with prejudice ten business days after the Effective Date, as that term is defined in the Settlement Agreement, except that the Court shall retain continuing jurisdiction limited to enforcing the Settlement Agreement. 16. Neither the Settlement Agreement, nor this Order, nor the certification of the Class, nor any communication or action by the parties in connection with the Settlement constitutes or shall be deemed to constitute an admission by Morgan Stanley of any liability or wrongdoing whatsoever, or to constitute a finding by this Court as to the merits of any claim or

-8defense asserted or that could have been asserted in this action, or as to any wrongdoing by Morgan Stanley. Neither the Settlement Agreement nor this Order is or shall be used or deemed to be an admission in any action or proceeding of any fault, liability or wrongdoing by any person or entity; and neither the Settlement Agreement, nor any negotiations or proceedings related thereto, nor this Order, nor any related document or communication, shall be offered or received in evidence against any person or entity in any action or proceeding as an admission, concession, presumption or inference as to the merits of any claim or defense; however, the Settlement Agreement or this Order may be received in evidence in any proceeding in this Court as may be necessary to consummate or enforce the Settlement Agreement or this Order.
17. Disclosure to third parties of the documents and information discussed or exchanged during the parties' confidential settlement negotiations and mediation to any third party not specified in the parties' confidentiality agreements is hereby enjoined.
18. Without affecting the finality of this Order, this Court retains exclusive jurisdiction over the consummation, performance, administration, effectuation and enforcement of the Settlement Agreement, this Order and Administrative Order No. 2. In addition, without affecting the finality of this Order, this Court retains jurisdiction over the parties and each Class Member for the purpose of issuing such further orders and directions as may be necessary or appropriate for the construction, implementation and enforcement of the terms of the Settlement Agreement, this Order and Administrative Order No. 2; however, Lead Class Counsel and counsel for Morgan Stanley shall have the exclusive right to enforce the provisions of the Settlement Agreement. Morgan Stanley and every Class Member is hereby deemed to have submitted irrevocably to the exclusive jurisdiction of this Court for any suit, action, proceeding

-9or dispute relating to this Order or the Settlement Agreement, except to the extent permitted by the Settlement Agreement for resolution in a different forum. Notwithstanding that this Court retains jurisdiction to enforce and administer the terms of the Settlement Agreement, and any matters that may arise therefrom, this Order is final.
SIGNED this 26th day of October, 2007.
/s/ RICHARD W. ROBERTS United States District Judge

-10-
APPENDIX A: Class Members Opted Out
Sharon Abbey Celie Althoff Ellen Baker Vickie Bartholomew Karen Crovicz Sarah Cugini Kelsey Ann Davis Deborah Jean Dodson Nirvana Fahmy Bonnie M. Gibbs Alice I. Hughes Jessica Kartzinel Deborah Konigsberg Louis E. Ladd Rani Lau Audrey Lohn Daisy Theodora Madencis-Jaffe Jane B. McMillan Leigh-Ann McWherter Linda C. Mills Mary Horan Musso Karen Perri Karen R. Prebonick Angelyn Russell Melinda Sander Chanie Schwartz Norma Sepluveda Anne Marie Slowik Carol Smith Bonnie Anne Stahlman Barbara Jeane Zech

 
 Case 1:06-cv-01142-RWR Document t Filed 06/22/2006 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves, Debra Shaw, Jan Tyler, Cheryl Guistiniano, and Laurie Blackburn,
On behalf of themselves and all others similarly situated,
Plaintiffs,

Civil No.
CLASS ACTION JURY TRIAL DEMAND

Morgan Stanley DW, Inc.,

Defendants.

COMPLAINT Plaintiffs, for their Complaint against defendant Morgan Stanley DW, Inc. ("Morgan Stanley"), allege and state, as follows:
Introduction 1. This case arises out of Morgan Stanley’s systemic company-wide discriminatory treatment of its female financial advisors in violation of federal and applicable state civil rights laws. Having satisfied all administrative prerequisites, Plaintiffs now file this Complaint.
Parties A. Plaintiffs & Class Representatives - Financial Advisors 2 Joanne Augst-Johnson is a female resident and citizen of Plymouth, Minnesota. She was employed by Morgan Stanley as a financial advisor in its Wayzata, Minnesota branch from December 1999 through January 2006.

69341

Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 2 of 12
3. Nancy Reeves is a female resident and citizen of Colorado Springs, Colorado. She was employed by Morgan Stanley as a financial advisor in its Colorado Springs branch from July 1987 through July 2004.
4. Debra K. Shaw is a resident and citizen of Hayden, Colorado. She was employed by Morgan Stanley as a financial advisor in its Denver branch from 1991 through January 2005.
5. Jan Tyler is a female resident and citizen of Denver, Colorado. She was employed by Morgan Stanley as a financial adviser in its Denver branch from October 1996 through August 2005.
6. Cheryl Guistiniano is a female resident and citizen of Gig Harbor, Washington. She was employed by Morgan Stanley as a financial advisor in its Rancho Bernardo, California and Gig Harbor branches from July 1999 through August 2005.
7. Laurie Blackburn is a female resident and citizen of Alexandria, Virginia. She was employed by Morgan Stanley as a financial advisor in its Alexandria branch from April 1996 through August 2005.
B. Defendant 8. Morgan Stanley DW, Inc. ("Morgan Stanley") is a Delaware corporation with its principal place of business in Purchase, NY. Morgan Stanley currently maintains a field force of approximately 8,500 financial advisors and has branch offices throughout the United States.
Jurisdiction 9. This court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1343 and 1367 because this action is brought under Title VII of the Civil
69341

Case 1:06-cv-01142-RWR Document t Filed 06/22/2006 Page 3 of 12
Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq. prohibiting gender discrimination in employment, and with respect to two Plaintiffs, under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 1621 et seq. prohibiting age discrimination in employment. This court has pendant jurisdiction over the claims brought pursuant to state and local laws prohibiting both gender and age discrimination in employment.
Exhaustion of Administrative Remedies 10. Plaintiffs have each filed timely charges of discrimination with the Equal Employment Opportunity Commission ("EEOC") and applicable state and/or local agencies alleging, among other things, class-wide gender discrimination against Morgan Stanley with respect to the compensation, promotion and termination of financial advisors in violation of Title VII and applicable state and/or local civil rights laws. 11. Plaintiffs have each requested and/0r received notices of right to sue from the EEOC and other administrative agencies and, accordingly, have exhausted all administrative prerequisites for the maintenance of this action.
Facts 12. Since at least August 5, 2003, Morgan Stanley has systematically denied equal employment opportunities to its female financial advisers. Morgan Stanley has engaged in a pattern and practice of gender discrimination with respect to compensating and promoting females from the position of financial advisor to other more prestigious roles or positions such as the position of branch manager. Morgan Stanley has engaged in a pattern and practice of gender discrimination with respect to other terms and conditions of employment of female financial advisors that affect compensation and promotion
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opportunities including, but not limited to: training and mentoring; account assignments; and, participation in company approved "partnership" arrangements with other financial advisers.
13. Female financial advisors have. experienced discrimination with respect to training and mentoring.
14. Female financial advisers have experienced discrimination with respect to the assignment of accounts in multiple ways
15. Female financial advisers have experienced discrimination with respect to participation in company approved "partnership" arrangements with male financial advisers in several ways.
16. Female financial advisers have also experienced discrimination with respect to career advancement, most noticeably in obtaining promotions to the branch manager position.
17. Female financial advisers have experienced discrimination with respect to other general terms and conditions of employment including, but not limited to, assignment of office space and sales support staff.
Class Action Allegations 18. Pursuant to Fed. R. Civ. P. 23(b)(2) and (b)(3), Plaintiffs Joanne AugustJohnson, Nancy Reeves, Debra K. Shaw, Jan Tyler, Cheryl Guistiniano and Laurie Blackburn seek to represent a nation-wide class consisting of: All women employed by Morgan Stanley as financial advisers at any time between August 5, 2003 and the present. Plaintiffs reserve the right to seek to represent sub-classes of the nation-wide class.
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 5 of 12

19. Numerosity. The number of women in the class exceeds 3,000. It would

be impracticable to bring all, or even a substantial percentage of, such persons before the

Court as individual plaintiffs through joinder.

20. Commonality. There are questions of law and fact common to the class.

The overarching question of law and fact that is common to all members of the class is

whether Morgan Stanley, through the acts and/or omissions of its management and

supervisory workforce, has adopted and/or maintained a policy or practice of employment

discrimination that is generally applicable to the class of all of Morgan Stanley’s female

financial advisor incumbents. This overarching common issue of law and fact includes

numerous subissues of law and fact that are also common to all members of the class.

These subissues include, but are not limited to, the following:

¯

Whether Morgan Stanley’s female financial advisors have been promoted

at rates that are disproportionately low compared to the rates at which

male financial advisors have been promoted;

¯ Whether Morgan Stanley’s female financial advisors have been afforded treatment in respect of numerous aspects of employment (including training, account distribution, and partnership arrangements) that is less favorable than the treatment afforded by Morgan Stanley to its male financial advisors;

¯

Whether the reason that Morgan Stanley has afforded its female financial

advisors less favorable treatment than its male financial advisors is the

acceptance of an stereotype;

¯

Whether the employment policies or practices of Morgan Stanley that have

adversely affected its female advisors violate Title VII under either a

disparate treatment or a disparate impact theory;

¯

Whether Morgan Stanley’s discriminatory employment practices constitute

a "continuing violation’’; and,

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¯

Whether Morgan Stanley’s discriminatory employment practices are

sufficiently egregious to justify the imposition of punitive damages under

Title VII.

21. Typicality. The claims of each of the above-identified class

representatives are typical of the claims of all class members because: (a) they have all

been subjected to the same company-wide practice of gender discrimination in

employment; (b) all of their claims are based upon allegations that they have been

adversely affected by that practice of gender discrimination in a similar manner in that

they have received less favorable treatment than their male counterparts with respect to

numerous aspects of employment; and, (c) their claims are all based on the same legal

theory or theories.

22. Adequacy of Representation. All of the above-identified class

representatives are adequate representatives of the class because: (1) they are willing and

able to represent the proposed class and have every incentive to pursue this action to a

successful conclusion; (2) their interests are not in any way antagonistic to those of the

other class members; and (3) they are represented by counsel experienced in litigating

major class actions in the field of employment discrimination.

23. Propriety of Maintenance of Class Action Under Fed R. Civ. P. 23(o)(2).

Class action status is appropriate under Fed. R. Civ. P. 23(b)(2) because Morgan Stanley

has acted and/or refused to act on grounds generally applicable to the class, thereby

making declaratory and final injunctive relief appropriate. Such generally applicable

grounds consist of the adoption and/or maintenance by Morgan Stanley of a common,

company-wide policy or practice of gender discrimination in employment to which each

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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 7 of 12
member of the class has been subjected.This relief would predominate over monetary relief.
24. Propriety Of Maintenance of Class Action Under Fed Civ. P. 23(o)(3). Class action status is also appropriate under Fed. R. Civ. P. 23(b)(3). The common questions of law and fact identified above predominate over questions affecting only individual members. A class action is superior to other available methods for the fair and efficient adjudication of this litigation. Inasmuch as all members of the class are geographically dispersed throughout the country and allege that they were subjected to the same company-wide policy or practice of gender discrimination, requiring each class member to pursue her claim individually would entail needless duplication and would waste the resources of both the parties and the judiciary. The financial burden of proving Morgan Stanley engaged in such a pattern or practice of discrimination would also make the prosecution of individual actions virtually impossible for most, if not all, members of the class.
COUNT I EMPLOYMENT DISCRIMINATION ON THE BASIS OF GENDER --
CLASS CLAIMS FOR RELIEF 25. Plaintiffs restate and reallege the allegations contained in Paragraphs 1 through :24 of this Complaint as though set forth here in full. :26. Plaintiffs and members of the class are employees of Morgan Stanley within the meaning of 42 U.S.C. § 2000(e) et seq.
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 8 of 12
27. The discriminatory policies or practices of Morgan Stanley, as set forth in this Count, have denied Plaintiffs and members of the class their right to equal employment opportunity in violation of 42 U.S.C. § 2000(e) et seq.
28. Morgan Stanley has adopted and/or maintained a system-wide policy or practice of gender discrimination by, among other things, denying Plaintiffs and members of the class equal opportunities as described above.
29. Morgan Stanley has adopted and/or maintained subjective employment practices, including but not limited to, subjective practices for assessing and evaluating the ability and potential of their financial advisors that have had the adverse impact of dewing female advisors equal career advancement and other employment opportunities on account of their gender.
30. By reason of Morgan Stanley’s discriminatory policies or practices as set forth in this Count, Plaintiffs and members of class have suffered damages including, but not limited to, lost income, lost benefits, embarrassment, emotional distress, humiliation, indignity and a reduced quality of life. Plaintiffs and members of the class are threatened with further injury and loss which are irreparable in nature and for which they have no adequate remedy at law.
COUNT II EMPLOYMENT DISCRIMINATION ON THE BASIS OF GENDER --
INDIVIDUAL CLAIMS FOR RELIEF 31. Plaintiffs Jan Tyler, Cheryl Guistiniano and Laurie Blackburn restate and reallege the allegations contained in Paragraphs 1 through 17 of this Complaint as though set forth here in full.
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 9 of 12
32. Plaintiffs Jan Tyler, Cheryl Guistiniano and Laurie Blackburn experienced gender discrimination with respect to their terminations of employment pursuant to Morgan ¯ Stanley’s August 2005 "reduction in force." Upon information and belief, Morgan Stanely did not apply its RIF criteria consistently to male and female financial advisers and, as a result, Plaintiffs were terminated whereas similarly situated male financial advisers were retained.
33. Morgan Stanley’s termination of the employment of Plaintiffs was intentional,malicious, deliberate, willful and oppressive, and was carried out with reckless and callous disregard for their respective rights.
34. By reason of Morgan Stanley’s discriminatory and unlawful employment practices as set forth in this Count, Plaintiffs Jan Tyler, Cheryl Guistiniano and Laurie Blackburn have suffered damage including, but not limited to, lost income, lost benefits, embarrassment, emotional distress, physical injury, humiliation, indignity and a reduced quality of life.
COUNT III EMPLOYMENT DISCRIMINATION ON THE BASIS OF AGE --
INDIVIDUAL CLAIMS FOR RELIEF 35. Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw, who are age 40 or above, restate and reallege the allegations contained in Paragraphs 1 through 17 and 32 of this Complaint as though set forth here in full. 36. Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw are employees of Morgan Stanley within the meaning of 29 U.S.C. § 630 and other applicable civil rights laws prohibiting discrimination in employment on the basis of age.
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 10 of 12
37. The adverse employment actions experienced by Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw as described above as well as the adverse treatment of Plaintiff Debra K. Shaw with respect to the company imposed terms and conditions of the dissolution of her partnership arrangement were also motivated by age bias in violation of 29 U.S.C. § 621 et seq. and other applicable civil rights laws prohibiting discrimination in employment on the basis of age.
38. Morgan Stanley’s discriminatory, and unlawful employment practices against Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw on the basis of age were intentional, malicious, deliberate, willful and oppressive, and were carried out with reckless and callous disregard for their respective rights.
39. By reason of Morgan Stanley’s discriminatory and unlawful employment practices as set forth in this Count, Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw have suffered damage including, but not limited to, lost income, lost benefits, embarrassment, emotional distress, physical injury, humiliation, indignity and a reduced quality of life.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectively pray: 1. That this case be maintained as a class action on behalf of the proposed class; that Plaintiffs be designated as representatives of the class, and that their counsel of record be designated as Class Counsel; 2. That the practices of Defendant complained of herein be determined and adjudged to be in violation of the rights of the Plaintiffs and the members of the class
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 11 of 12
under Title VII, the ADEA and state and local laws prohibiting gender and age discrimination in employment;.
3. That a permanent prohibitory injunction be issued prohibiting Defendant, and its officers, agents, employees and successors from engaging in the employment practices complained of herein;
4. That a permanent mandatory injunction be issued requiring that Defendant adopt employment practices in accord with the requirements of Title VII, the ADEA and state and local laws prohibiting gender and age discrimination in employment;
5. That judgment be entered in favor of Plaintiffs and the members of the class set forth herein, and against Defendant, for back pay (including interest or an appropriate inflation factor), front pay, benefits and all other amounts owed to Plaintiffs and the members of the class;
6. That the Plaintiffs and members of the class be awarded compensatory and punitive damages;
7. That Plaintiffs Nancy Reeves, Jan Tyler and Debra K. Shaw be awarded liquidated damages to the extent allowed by law;
8. That the Plaintiffs and members of the class be awarded such other and further legal and equitable relief as may be found appropriate and as the Court may deem just or equitable;
9. That the Plaintiffs and members of the class be awarded costs including, but not limited to, attorneys’ fees, experts’ fees, and other costs and expenses of this litigation; and
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Case 1:06-cv-01142-RWR Document 1 Filed 06/22/2006 Page 12 of 12

10. That the Court retain jurisdiction over Defendant until such time as it is satisfied that it has remedied the practices complained of and is determined to be in full compliance with the law.
Jury, Demand Plaintiffs demand trial by jury on all issues triable of right by jury.
This Z~ay of June, 2006. Respectfully submitted,

Steven M. S~dager (~3C N~o: ~ 18736) SPRENGER & LANG, PLLC 1400 Eye Street, N.W. Suite 500 Washington, DC 20005 (202) 265-8010

sCtev~eSn~e~ka~et (DC No 359804D’~N°" "4~ 0970) ; Lisa M. Bornstein (DC No. 485933) Sandi Farrell (DC No. 491677) MEHRI & SKALET, PLLC 1300 19th Street, N.W. Suite 400 Washington, DC 20036
(202)822-5100

Mara R. Thompson (MN No. 196125)* SPRENGER & LANG, PLLC 310 Fourth Avenue S. Suite 600 Minneapolis, MN 55403 (612) 871-8910

Chris Moody (NM No. 1850)* Whitney Warner (NM No. 10600)* MOODY & WARNER, P.C. 4169 Montgomery Blvd. NE Albuquerque, NM 87109 (505)944-0033

A TTORNEYS FOR PLAINTIFFS AND THE CLASS

* Pro Hac Vice Application to be filed

69341 12

 
 Augst-Johnson v. Morgan Stanley & Co., Inc., 247 F.R.D. 25 (2008)

247 F.R.D. 25 United States District Court,
District of Columbia.
Joanne AUGST-JOHNSON et al., Plaintiffs, v.
MORGAN STANLEY & CO. INC., Defendant.
Civil Action No. 06-1142 (RWR). | Jan. 2, 2008.
Attorneys and Law Firms
*25 Steven M. Sprenger, Sprenger & Lang, PLLC, Cyrus Mehri, Mehri & Skalet, PLLC, Washington, DC, Christopher M. Moody, Whitney Warner, Moody & Warner, P.C., Albuquerque, NM, Mara R. Thompson, Sprenger & Lang, PLLC, Minneapolis, MN, for Plaintiffs.
Grace E. Speights, Morgan, Lewis & Bockius, LLP, Washington, DC, for Defendant.
Opinion
MEMORANDUM ORDER
RICHARD W. ROBERTS, District Judge.
Plaintiff class member Teresa Grubman has made a request, opposed by the defendant, to opt out late from the class. The opt-out deadline was September 10, 2007. By letter dated November 14, 2007, Grubman notified the parties of her desire to opt out.
The uncontroverted facts in the record establish that notice of the proposed class settlement and the opt-out deadline was not mailed to Grubman’s correct address until September 14, 2007, after the opt-out deadline had passed, that Grubman did not receive the notice until September 24, 2007, *26 that Grubman immediately attempted to contact class counsel, that by no later than mid-October Grubman asked class counsel’s office about her options, and that she never received a response from class counsel to her inquiry. She argues that two additional circumstances entitle her to opt out now. She claims that she was mistaken in her understanding of her notification obligations regarding remaining or opting out as a class member. She also faults defendants’ counsel for not raising sooner than mid-October her failure to opt out.
[1] A district court has discretion under Federal Rules of Civil Procedure 6(b) and 60(b) to modify its order to allow a late opt-out from a class action. In re Vitamins Antitrust Class Actions, 327 F.3d 1207, 1209-10

(D.C.Cir.2003). Specifically, “Rule 60(b) provides that ‘[o]n motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect, ... or (6) any other reason justifying relief from the operation of the judgment.’ Fed.R.Civ.P. 60(b).” Id. at 1209.
[2] Defendant insists that Grubman must show excusable neglect to justify a late opt-out. The authority from this circuit cited by defendant, however, does not stand for the proposition that a late opt-out may be allowed only upon a showing of excusable neglect. Rather, one of the cases cited notes specifically that relief may be granted “upon such terms as are just” for “any other reason justifying relief from the operation of the judgment”. Id. The other case cited merely affirmed the lower court’s application of the excusable neglect standard, but did not hold that it was the only basis for granting a late opt-out request. See In re Nat’l Student Marketing Litig., 530 F.2d 1012, 1014 (D.C.Cir.1976) (stating that “appellants were properly required to establish excusable neglect sufficient to outweigh the interest in the finality and repose of judicial orders”). Moreover, the cases from this circuit cited by defendant are distinguishable on the issue of late notice to the plaintiff. Late notice was not a feature of the matter in In re Vitamins Antitrust Class Actions, 327 F.3d at 1209, and was not established in In re National Student Marketing Litigation, 530 F.2d at 1014-15. By contrast, late notice is a key feature of this matter and not a matter in dispute. With no neglect at all by Grubman, any opt-out by Grubman would have been untimely due to late delivery of class notice to her.
The traditional excusable neglect standard would appear inappropriate here, although late delivery of class notice does not wholly absolve plaintiff of any obligation of due diligence. Her claim that she misunderstood the plain language of the notice requiring written notice to opt out is unpersuasive, but in any event would be insufficient alone to have excused a wholesale failure to opt out in writing. Nor can imposing upon defense counsel some burden they do not rightly carry of raising quickly Grubman’s failure to opt out timely entitle her to the relief she seeks. Under the circumstances, waiting until November 14, 2007 to opt out in writing may be near the outer limits of the reasonable diligence required of her. Nonetheless, since any opt-out notice by Grubman would have been untimely here through no fault of hers, Grubman tried to contact class counsel immediately after she received the class notice, class counsel did not provide the advice she sought, there is no showing that Grubman acted in bad faith or with intent to delay for tactical reasons, and there is no showing that defendant is prejudiced by the tardiness of the opt-out in a case where over 99% of the class members appear to have received
1

Augst-Johnson v. Morgan Stanley & Co., Inc., 247 F.R.D. 25 (2008)

the class notice, the relief Grubman seeks is warranted. See Fed.R.Civ.P. 60(b)(1) and (6); Vitamins, 327 F.3d at 1209-10; Butler v. Fairbanks Capital, Civil Action No. 04-367(RMU), 2005 WL 5108537, *5 (D.D.C. Jan.3, 2005). Accordingly, it is hereby
ORDERED that Grubman’s request to opt out of the class

be, and hereby is, GRANTED. Appendix A to the Final Order dated October 26, 2007 is amended to add the name of Teresa Grubman.
	  

2

 
 Case 1:06-cv-01142-RWR Document 33 Filed 10/01/2007 Page 1 of 3

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves,

)

Debra Shaw, Jan Tyler, Cheryl Giustiniano,

)

Laurie Blackburn, Erna Tarantino,

)

and Elizabeth Reinke,

)

)

On behalf of themselves and all others similarly )

situated,

)

)

Plaintiffs,

)

)

v.

)

)

Morgan Stanley & Co. Incorporated, formerly )

known as Morgan Stanley DW Inc.,

)

)

Defendant.

)

Case No. 1:06-cv-01142 (RWR) CLASS ACTION

JOINT MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

Plaintiffs and Defendant Morgan Stanley & Co. Incorporated (“Morgan Stanley”), by and through their respective counsel and pursuant to Fed. R. Civ. P. 23(e), hereby move the Court for final approval of their proposed Settlement Agreement, including all orders necessary to effectuate their proposed class action settlement. A memorandum in support of this Motion accompanies this Motion. A proposed Final Order Approving Class Representatives, Certifying Class, Appointing Class Counsel, Approving Settlement Agreement, Awarding Fees and Costs and Dismissing Action Subject to the Court’s Continuing Jurisdiction will accompany Class Counsel’s Supplemental Motion in Support of Class Counsel’s Motion for an Award of Attorneys’ Fees and Expenses, which will be filed within two days of this Motion.

Case 1:06-cv-01142-RWR Document 33 Filed 10/01/2007 Page 2 of 3

Dated: October 1, 2007

/s/ Cyrus Mehri Cyrus Mehri (DC No. 420970) Steven A. Skalet (DC No. 359804) Lisa M. Bornstein (DC No. 485933) Anna M. Pohl (DC No. 489407) MEHRI & SKALET, PLLC 1250 Connecticut Ave. NW Suite 300 Washington, DC 20036 (202)822-5100
Steven M. Sprenger (DC No. 418736) SPRENGER & LANG, PLLC 1400 Eye Street, N.W. Suite 500 Washington, DC 20005 (202) 265-8010
Mara R. Thompson (Pro Hac Vice) SPRENGER & LANG, PLLC 310 Fourth Avenue S. Suite 600 Minneapolis, MN 55415 (612) 871-8910
Christopher M. Moody (Pro Hac Vice) Whitney Warner (Pro Hac Vice) MOODY & WARNER, P.C. 4169 Montgomery Blvd. NE Albuquerque, NM 87109 (505)944-0033
Attorneys for Plaintiffs and the Class

Case 1:06-cv-01142-RWR Document 33 Filed 10/01/2007 Page 3 of 3

Certificate of Service
I herby certify the foregoing motion and supporting memorandum were served via the Court’s ECF notification system and by first-class mail, postage prepaid, this 1st day of October, 2007, upon the following:

Grace E. Speights MORGAN, LEWIS & BOCKIUS, LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004
Kenneth J. Turnbull MORGAN, LEWIS & BOCKIUS, LLP 101 Park Avenue New York, NY 10178

Mark S. Dichter MORGAN, LEWIS & BOCKIUS, LLP 1701 Market Street Philadelphia, PA 19103-2921

/s/ Cyrus Mehri Cyrus Mehri

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 1 of 39

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves,

)

Debra Shaw, Jan Tyler, Cheryl Giustiniano,

)

Laurie Blackburn, Erna Tarantino,

)

and Elizabeth Reinke,

)

)

On behalf of themselves and all others similarly )

situated,

)

)

Plaintiffs,

)

)

v.

)

)

Morgan Stanley & Co. Incorporated, formerly )

known as Morgan Stanley DW Inc.,

)

)

Defendant.

)

Case No. 1:06-cv-01142 (RWR) CLASS ACTION

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF JOINT MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 2 of 39
TABLE OF CONTENTS
INTRODUCTION......................................................................................................................... 1 BACKGROUND ........................................................................................................................... 1
I. PROCEDURAL HISTORY .................................................................................................. 1 III. SUMMARY OF THE SETTLEMENT TERMS................................................................. 3
A. General Terms ...................................................................................................................... 3 B. Programmatic Relief............................................................................................................. 4 C. Monetary Relief for Class Members and Named Plaintiffs.............................................. 5 ARGUMENT................................................................................................................................. 7 I. CLASS COUNSEL HAS COMPLIED WITH THE NOTICE PROVISIONS................ 7 II. THE COURT SHOULD APPROVE THE SETTLEMENT CLASS .............................. 9
A. The Proposed Settlement Class Satisfies Rule 23(a) ...................................................... 9 1. The Settlement Class Is So Numerous That Joinder of All Members Is Impracticable..................................................................................................................... 10 2. Questions of Law and Fact Are Common to the Settlement Class........................... 10 3. The Named Plaintiffs’ Claims Are Typical of the Class Claims............................... 11 4. The Named Plaintiffs Are Adequate Representatives Under Rule 23(a)(4 ............. 12
B. The Proposed Settlement Class Satisfies Rule 23(b) .................................................... 12 C. Class Counsel Are Competent Under Rule 23(g) to Represent the Class .................. 14 III. FINAL APPROVAL IS APPROPRIATE BECAUSE THE SETTLEMENT AGREEMENT IS FAIR, REASONABLE AND ADEQUATE........................................... 15 A. The Settlement Provides Adequate Relief to the Class ................................................ 18 B. The Settlement Is Fair in the Allocation of Benefits Between Named Plaintiffs and Class Members...................................................................................................................... 20
i

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 3 of 39 C. The Response From Members of the Class Has Been Overwhelmingly Positive and Demonstrates that the Settlement Is Fair .......................................................................... 21
1. The Vast Majority of Class Members Support the Settlement................................. 21 2. The Few Objections Received Are Without Merit..................................................... 22
a. The Objection of Mary Harris Evans Should Be Overruled ....................................... 22 b. The Objection of Jennifer Cropper Should Be Overruled........................................... 23 c. The Objection of Janice Grant Should Be Overruled.................................................. 24
i. The Monetary Is Not Inadequate .............................................................................. 25 ii. The Class Definition In Not “Unfairly Restrictive” ................................................ 28 iii. The Notice and Claims Process Was Adequate ...................................................... 29 iv. Injunctive Relief Is Fair and Adequate.................................................................... 30 IV. THE COURT SHOULD ENTER ADMINISTRATIVE ORDER NO. 2..................... 32 V. CONCLUSION ................................................................................................................... 33
ii

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 4 of 39
TABLE OF AUTHORITIES Cases Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) ............................................................ 14 **Barnes v. District of Columbia, 242 F.R.D. 113 (D.D.C. 2007) ............................................ 12, 13 **Blackman v. District of Columbia, 454 F. Supp. 2d 1 (D.D.C. 2006) .................................... 15, 16 Bynum v. District of Columbia, 214 F.R.D. 27 (D.D.C. 2003)..................................................... 11 Bynum v. District of Columbia, 217 F.R.D. 43 (D.D.C. 2003)..................................................... 13 **Bynum v. District of Columbia, 412 F. Supp. 2d 73 (D.D.C. 2006) ..................... 15, 21, 22, 24, 26 Chang v. United States, 217 F.R.D. 262 (D.D.C. 2003)............................................................... 11 Disability Rights Council of Greater Wash. v. Wash. Metro. Area Transit Auth., 239 F.R.D. 9
(D.D.C. 2006) ............................................................................................................................ 10 Eubanks v. Billington, 110 F.3d 87 (D.C. Cir. 1997) ................................................................... 13 Frazier v. Consolidated Rail Corp., 851 F.2d 1447 (D.C. Cir. 1988) .......................................... 10 Freeport Partners, LLC v. Allbritton, 2006 U.S. Dist. LEXIS 9710 (D.D.C. March 13, 2006) .. 19 Hammon v. Barry, 752 F. Supp. 1087 (D.D.C. 1990) ............................................................ 16, 17 In re Agent Orange Prod. Liab. Litig., 818 F.2d 145 (2d Cir. 1987) ........................................... 21 In re Corrugated Container Antitrust Litigation, 643 F.2d 195 (5th Cir. 1981) .......................... 21 **In re Lorazepam & Clorazepate Antitrust Litig., 205 F.R.D. 369 (D.D.C. 2002).................. 22, 28 In re Vitamins Antitrust Litig., 209 F.R.D. 251 (D.D.C. 2002) .............................................. 10, 11 In re Vitamins Antitrust Litig., 305 F. Supp. 2d 100, 103 (D.D.C. 2004)..................................... 16 Luevano v. Campbell, 93 F.R.D. 68 (D.D.C. 1981....................................................................... 16 **Mayfield v. Barr, 985 F.2d 1090 (D.C. Cir. 1993) ................................................................. 16, 23 Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) ...................................................................... 9, 30 Osher v. SCA Realty, Inc., 945 F. Supp. 298 (D.D.C. 1996) ........................................................ 16
iii

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 5 of 39 Pigford v. Glickman, 182 F.R.D. 341 (D.D.C. 1998) ................................................................... 11 **Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999) ................................................... 15, 18, 19, 28 Taylor v. D.C. Water & Sewer Auth., 241 F.R.D. 33 (D.D.C. 2007) ........................................... 10 **Thomas v. Albright, 139 F.3d 227 (D.C. Cir. 1998) ............................................................... 18, 28 United States v. District of Columbia, 933 F. Supp. 42 (D.D.C. 1996)........................................ 17 Other Authorities 5 Moore’s Federal Practice § 23.22[3][a] (Matthew Bender 3d ed. 1998) ................................... 9 Rules Fed. R. Civ. P. 23................................................................................................................ 8, 13, 14
iv

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 6 of 39

INTRODUCTION Plaintiffs Joanne Augst-Johnson, Nancy Reeves, Debra Shaw, Jan Tyler, Cheryl Giustiniano, Laurie Blackburn, Erna Tarantino, and Elizabeth Reinke (the “Named Plaintiffs” or “Class Representatives”), on behalf of the Settlement Class, respectfully request that this Court grant the parties’ Joint Motion for Final Approval of their Class Action Settlement Agreement. The proposed Settlement will provide Class Members with substantial programmatic and monetary relief. On July 17, 2007, this Court granted preliminary approval to the Settlement with Morgan Stanley & Co. Incorporated. (“Morgan Stanley”). Since then, Notice was provided by first class mail to each of the 2,867 members of the Settlement Class. Only two Class Members have objected to the Settlement, and a third person, who is not a Class Member, submitted a purported objection. No current employees have objected to the Settlement. Only one percent of Class Members have requested exclusion from the terms of the Settlement. As of October 1, 2007, the Claims Administrator, Settlement Services, Inc. (“SSI”) has received 907 Claim Forms from Class Members.1 The overwhelmingly positive response from Class Members provides strong evidence that this Settlement is fair, adequate, and reasonable in all respects and should be approved.
BACKGROUND I. PROCEDURAL HISTORY
The procedural history of this litigation and the terms of the Settlement Agreement are described in detail in Plaintiffs’ Memorandum in Support of Joint Motion for Preliminary Approval of Class Action Settlement and Class Counsel’s Motion for Award of Attorneys’ Fees

1

The Claims Administrator has not yet determined whether all persons who submitted

Claim Forms are, in fact, Class Members.

1

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 7 of 39
and Expenses (“Prelim. Mem.”), filed on April 24, 2007, at pp. 1-9. We review this history more briefly here.
This case began in early 2005, after Joanne Augst-Johnson contacted Mehri & Skalet, PLLC regarding her experiences at Morgan Stanley. Mehri & Skalet joined forces with Sprenger + Lang, PLLC, and Moody & Warner, P.C., who had been investigating the claims of Nancy Reeves, Debra Shaw, and Jan Tyler. The three firms collectively conducted interviews of more than 200 women employed in Morgan Stanley’s retail brokerage business. In the course of the investigation, four additional women stepped forward and were added as Named Plaintiffs in this action. (Declaration of Cyrus Mehri, (hereinafter “Mehri Decl.”), ¶¶ 4-5, 10-11), attached hereto as Exhibit 1.
The Named Plaintiffs in this case allege that Morgan Stanley discriminated against women Financial Advisors and Registered Financial Advisor Trainees with respect to distributions and transfers of accounts, work assignments, compensation, career advancement opportunities, termination, and other terms and conditions of employment, as described in the Amended Complaint, filed on April 24, 2007.
The parties entered into settlement negotiations in April 2005, well before a complaint was filed. During these negotiations, the parties entered into a tolling agreement, a confidentiality agreement, and exchanged information similar to the discovery that would have occurred during formal class discovery. This information included detailed information on company policies and practices and company-wide computer data concerning account distributions and compensation for women compared to men during the potential liability period. The data exchanged was thoroughly analyzed by recognized statistical expert, Dr. Janice Madden, a professor at the University of Pennsylvania and a principal in the consulting firm,
2

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 8 of 39
Econsult Corp. (Mehri Decl., ¶¶ 13). The information exchanged enabled the parties to fully assess their respective litigation positions. The exhaustive negotiations spanned more than two years, included over 15 in-person meetings and numerous telephone conferences and were facilitated by a skilled and highly respected mediator, Hunter H. Hughes, Esq. of Rogers & Hardin, LLP. (Id. at ¶ 15). These mediation efforts culminated in a Settlement Agreement executed on April 23, 2007. The parties filed a Joint Motion for Preliminary Approval of Class Action Settlement Agreement on April 24, 2007. A preliminary approval hearing was held on July 5, 2007, during which this Court suggested certain revisions to the Settlement Agreement and Notice to Class Members. Counsel for the parties made the changes suggested by the Court and filed revised versions of the Settlement Agreement and Notice on July 11 and July 16, 2007. On July 17, 2007, this Court preliminarily approved the proposed Settlement, provisionally certified the proposed Settlement Class, appointed the Named Plaintiffs as Class Representatives, approved the Notice and Claim Form, and designated Class Counsel. (Preliminary Approval Order, (hereinafter “Prelim. App. Order”), July 17, 2007). II. SUMMARY OF THE SETTLEMENT TERMS
A. General Terms The Settlement Class includes all women who were employed by Morgan Stanley as
Financial Advisors or Registered Financial Advisor Trainees at any time between August 5, 2003 and June 30, 2007. (Second Revised Settlement Agreement (hereinafter “Settlement Agreement”), § III.D.1, attached hereto as Exhibit 2). All Class Members who receive a monetary award under the Settlement will expressly release all claims that arise out of the allegations giving rise to this lawsuit. (Id., § V.A). Class Members who wished to opt out of the monetary portion of the Settlement were required to do so by submitting an opt-out statement
3

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 9 of 39
with the Court by September 10, 2007. (Id., § IV.C.5; Prelim. App. Order ¶ 8.) The terms of the Settlement are described in detail in Plaintiffs’ Preliminary Approval Memorandum at pp. 49 and are only briefly summarized here.
B. Programmatic Relief The programmatic relief agreed to in the Settlement consists of changes in company
policies and practices that plaintiffs alleged were the source of the sex discrimination that they and other women experienced. Among other things, Morgan Stanley has agreed to revise the “Power Rankings” used to allocate accounts and other business opportunities to ensure equitable and fair account distribution without regard to gender. Morgan Stanley will also implement account distribution policies to ensure equitable and fair distribution of the accounts of departing Financial Advisors, retiring Financial Advisors, departing Financial Advisor partners, and leads, call-ins, and walk-ins, and will computer-automate the account distribution process. (Settlement Agreement, § VII.C). The company will maintain the Branch Management Mobility project and develop and implement a comprehensive management and assessment and development program to provide candidates a path to assessment and selection as branch managers. (Id., § VII.B). The company will provide bi-annual diversity training to all management-level field personnel and include a diversity component to branch manager compensation designed to measure and reward efforts at recruiting, training and retaining women Financial Advisors. (Id.).
The parties have jointly selected Industrial Psychologists Dr. Kathleen Lundquist and Dr. Irwin Goldstein to work with Morgan Stanley and Class Counsel to develop meaningful, novel, state-of-the-art programs designed to attract, retain and enhance the success of women Financial Advisors and Registered Financial Advisor Trainees. The Industrial Psychologists will also develop meaningful, state-of-the-art programs designed to increase the participation of women
4

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 10 of 39

Financial Advisors in partnerships and in the receipt of retiring Financial Advisors’ accounts. (Id., § VII.F.2).
The term for the programmatic provisions of the Settlement is five years. During the five-year term, Morgan Stanley will regularly report to Class Counsel about Morgan Stanley’s compliance with its Settlement obligations through a Diversity Monitor hired pursuant to the Settlement Agreement. (Id., § VII.F.1 and § IX.C). The company will institute a state-of-the-art monitoring program developed with input from the jointly appointed expert Industrial Psychologists. (Id., § VII.F.2 and § IX.B). If Morgan Stanley fails to carry out any of its obligations, Class Counsel may bring an enforcement action following attempted voluntary resolution of the dispute. Any such enforcement action would be brought before an arbitration panel and subject to binding arbitration and Court oversight (Id., § X).
The parties estimate that Morgan Stanley will spend approximately $7.5 million on diversity efforts during the period of the Settlement Agreement. As a result of the actions taken by Morgan Stanley under this Agreement, the parties anticipate that the earnings of women Financial Advisors will increase by at least $16 million over the five-year term of the settlement. (Mehri Decl. ¶ 31).
C. Monetary Relief for Class Members and Named Plaintiffs On July 27, 2007, pursuant to the Settlement Agreement, Morgan Stanley paid $46
million by wire transfer to the MS-GWMG Financial Advisor Sex Discrimination Settlement Fund.2 The principal is expected to generate over $1 million in interest prior to Class Member distributions. (Mehri Decl. ¶ 25). Morgan Stanley will also pay the employer’s share of payroll

2

This sum, including the interest thereon, is intended to cover all attorneys’ fees and costs

Plaintiffs are requesting the Court award. Plaintiffs’ Motion for Attorneys’ Fees and Costs will

be filed within two days of this Motion.

5

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 11 of 39
taxes due on Class Member distributions. (Settlement Agreement, § VIII.F.2). Ultimately, the Settlement Fund, inclusive of interest and the employer’s share of payroll taxes, is likely to approach $50 million. (Mehri Decl. ¶ 25). The Settlement Fund will be used to pay the claims of Class Members (including the Named Plaintiffs), attorneys’ fees and litigation expenses, and costs to administer the claims process and to monitor and enforce the Settlement. (Settlement Agreement, § VIII.A).
The allocation of awards from the Claims Portion to Class Members, including the Named Plaintiffs, will be based on an allocation formula that includes an Earnings Regression component and a Claim Form component, each of which will be weighted equally in calculating a Class Member’s monetary award. (Id., § VIII.D.1-2). The Earnings Regression component, which will be developed by Plaintiffs’ labor economist and statistician, will consist of a mathematical calculation that accounts for both the claimant’s length of tenure at Morgan Stanley and the disparity between the claimant’s earnings during the liability period and those of male peers. (Id., § VIII.D.1). The Claim Form component, which will be administered by a Special Master, will be based on a formula that takes into consideration individual evidence of sex discrimination, individual evidence of compensatory damages, individual contributions to the litigation, and the release of claims asserted in administrative charges that exceed the scope of the Class claims. (Id., § VIII.D.2). No awards will be paid prior to final approval of the Settlement. (Id., § VIII.D.3.d). The Special Master will recommend a plan of allocation based on the Earnings Regression calculations and consideration of the Claim Forms, and will submit a Report and Recommendation to the Court for approval. (Id., § VIII.D.3.a-c). The Special Master’s report will include a discussion of the formula and the rationale therefore.
6

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 12 of 39
ARGUMENT I. CLASS COUNSEL HAS COMPLIED WITH THE NOTICE PROVISIONS
When this Court granted preliminary approval of the Settlement on July 17, 2007, it also approved the means for giving members of the Settlement Class notice of the proposed Settlement. As shown below, Class Counsel has fully complied with the Court’s directions regarding the notice program.
On April 30, 2007 and July 13, 2007, the parties supplied to the Claims Administrator, Settlement Services, Inc. (“SSI”), data on all female Financial Advisors and Registered Financial Advisor Trainees (current and former) who worked at Morgan Stanley at any time between August 5, 2003 and June 30, 2007. (Declaration of Mark Patton, ¶ 3 (hereinafter “Patton Decl.), attached hereto as Exhibit 3). This list contained contact information for 2,867 women who comprise the entire universe of potential Class Members. (Id.). On July 27, 2007, SSI mailed copies of the Notice, Claim Form, and Class Member Release approved by the Court (the “notice package”) to each person on the list provided by Morgan Stanley. (Id., ¶ 5). Three hundred and sixteen of the notice packages were returned to SSI as undeliverable; 41 of those had forwarding addresses on the returned envelopes and were promptly remailed. (Id., ¶ 7-8). When SSI searched for updated address information for all 316 undeliverable notices, 32 returned the same address and 284 new addresses were found. (Id., ¶ 8).
On September 14, 17 and 18, Class Counsel searched for updated addresses for the 32 addresses SSI did not find new addresses for using LEXIS-NEXIS’ SmartLinx tool. (Mehri Decl., ¶ 39). Where phone numbers were located, Class Counsel made efforts to call these Class Members or relatives of the Class Members and obtain updated addresses. (Id.) Class Counsel provided updated addresses for 13 Class Members to SSI on September 17 and 18, 2007. (Id.).
7

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 13 of 39

On September 14, 2007, SSI resent the Notice Package to all 316 Class Members whose original package had been returned as undeliverable. (Patton Decl., ¶ 8). Because the resending of the undeliverable notices was delayed, SSI resent all 316 notice packages via priority mail, with a bright yellow insert instructing Class Members to contact Class Counsel if they anticipated any problems meeting the deadlines. (Id.). Class Counsel has received phone calls from some of these Class Members and has instructed each of them to include a letter or note with her submission of a Claim Form indicating that she received her Notice too late to submit her Claim Form by the September 24, 2007 postmark deadline. (Mehri Decl., ¶ 40). As of October 1, 2007, there are only 21 Class Members, less than one percent of the Class, for whom SSI or Class Counsel could not find what appear to be accurate addresses. (Patton Decl., ¶ 10).3
The mailed notice packages provided actual notice to each Class Member, to the extent practicable. In addition to the mailed notice packages, Class Counsel created and maintained a website, www.morganstanleygendercase.com, which contained detailed information related to the proposed Settlement. On this website, a visitor can view and/or download the Amended Complaint; the Joint Motion for Preliminary Approval of Class Action Settlement; Plaintiffs’ Memorandum in Support of Preliminary Approval; the Second Revised Settlement Agreement; the Notice of Class Action, Proposed Settlement Agreement & Settlement Hearing; the Claim

3

Approximately 25 Class Members contacted Class Counsel after receiving the remailed

notice package. (Mehri Decl., ¶ 40). None of these callers indicated a desire to object to the

fairness of the Settlement. (Id.) Class Counsel did receive a copy of a letter sent to this Court

from Daniel J. Kaiser, Esq., who represents three Class Members involved in individual litigation

against Morgan Stanley. One of Mr. Kaiser’s clients is on the list of 316 Class Members whose

notice package was returned as undeliverable, and Class Counsel understand Mr. Kaiser plans to

attend the October 11, 2007 fairness hearing to request the Court give his clients leave to opt-out

of the Settlement even though the deadline has passed. Morgan Stanley has communicated to

Class Counsel its position is that Class Members whose opt-out requests are untimely must

submit a notarized affidavit or a declaration pursuant to 28 U.S.C. § 1746 swearing that they did

not receive the notice package before the opt-out deadline. (Mehri Decl., ¶ 43). Class Counsel

do not oppose this position.

8

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 14 of 39

Form; the Named Plaintiff Release; and the Class Member Release. This website was activated on July 5, 2006. (Mehri Decl., ¶ 36). Class Counsel also posted information related to the Settlement and/or links to the www.morganstanleygendercase.com website on their individual firm websites, www.findjustice.com (Mehri & Skalet, PLLC); www.sprengerlang.com (Sprenger & Lang, PLLC); and www.nmlaborlaw.com (Moody & Warner, P.C.). (Id., ¶ 37).
The Court should find that Class Counsel complied with every provision in the Settlement concerning notice. Due process requires that absent class members have the right to be heard and an opportunity to remove herself from the class, if she so desires. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 848 (1999). Class Counsel’s efforts at providing actual notice to virtually all Class Members have satisfied this requirement. II. THE COURT SHOULD APPROVE THE SETTLEMENT CLASS
On July 17, 2007, the Court provisionally found that the requirements of Fed. R. Civ. P. 23 (a) and (b)(2) and (b)(3) have been satisfied and granted preliminary approval. As part of the final approval process, the Court should conclude that all of the requirements of Rule 23 have indeed been satisfied and certify the Settlement Class.4
A. The Proposed Settlement Class Satisfies Rule 23(a) Under Rule 23(a) of the Federal Rules of Civil Procedure, a class may be certified when
“(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions

4

The Class Action Fairness Act provides that “[a]n order giving final approval of a

proposed settlement may not be issued earlier than 90 days after the later of the dates on which

the appropriate Federal official and the appropriate State officials are served with the notice” of

the proposed settlement. 28 U.S.C. § 1715(d). The parties provided notice to the United States

Attorney General and the Attorneys General of all 50 states and the District of Columbia on May

8, 2007, and again on July 25, 2007, after implementing the revisions recommended by this

Court at the Preliminary Approval Hearing. (Declaration of Mark Dichter (hereinafter “Dichter

Decl.,” ¶ 9, attached hereto as Exhibit 4). Thus, final approval to this Settlement may be given

after October 24, 2007.

9

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 15 of 39
of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23 (a). The Settlement Class meets each of these requirements.
1. The Settlement Class Is So Numerous That Joinder of All Members Is Impracticable
Courts generally agree that classes with 40 or more members satisfy the numerosity requirement. See Frazier v. Consolidated Rail Corp., 851 F.2d 1447, 1456 n. 10 (D.C. Cir. 1988); 5 Moore’s Federal Practice § 23.22[3][a] (Matthew Bender 3d ed. 1998). The parties have submitted to the Claims Administrator a list of 2,867 Class Members. (Patton Decl., ¶ 4-5). Therefore, the Settlement Class clearly meets the numerosity requirement.
2. Questions of Law and Fact Are Common to the Settlement Class Commonality requires that the claims in a case raise issues that involve questions of law or fact common to the class, but does not require that every issue of law or fact be identical with respect to each class member. See, e.g., Taylor v. D.C. Water & Sewer Auth., 241 F.R.D. 33, 37 (D.D.C. 2007). Generally, the commonality requirement is satisfied where there is at least one issue which, if resolved, affects all or a significant number of class members. See, e.g., Disability Rights Council of Greater Wash. v. Wash. Metro. Area Transit Auth., 239 F.R.D. 9, 25-26 (D.D.C. 2006). For this reason, the commonality requirement is “easily met.” In re Vitamins Antitrust Litig., 209 F.R.D. 251, 259 (D.D.C. 2002). The programmatic relief provisions of the proposed Settlement demonstrate that the claims of all members of the Class raise numerous common issues. Morgan Stanley maintains its employment practices and policies in much the same way at each of its branch offices. All of the Class Members, both current and former Morgan Stanley employees, were subjected to the
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same employment policies and practices during their tenure as Financial Advisors or Registered Financial Advisor Trainees.
The similarity of these employment policies and practices presents a number of factual and legal issues common to members of the Settlement Class, some of which are set forth in the Amended Complaint at paragraph 22. The commonality requirement is thus easily satisfied in this case. See, e.g., Bynum v. District of Columbia, 214 F.R.D. 27, 33-34 (D.D.C. 2003) (finding commonality where class members were affected by the same policy or practice, even if the extent of individual class members’ injuries varied).
3. The Named Plaintiffs’ Claims Are Typical of the Class Claims The Rule 23(a) typicality requirement is met if “each class member’s claim arises from the same course of events that led to the claims of the representative parties and each class member makes similar legal arguments to prove the defendant’s liability.” Pigford v. Glickman, 182 F.R.D. 341, 349 (D.D.C. 1998) (internal citations omitted); see also Chang v. United States, 217 F.R.D. 262, 272 (D.D.C. 2003) (“typicality focuses on the similarity of the legal and remedial theories behind the claims of the named representatives and those of the putative class”). Courts have liberally construed the typicality requirement. See In re Vitamin Antitrust Litig., 209 F.R.D. at 260. Here, all Class Members’ claims arise from Morgan Stanley’s employment policies and practices. The eight Named Plaintiffs are or were employed by Morgan Stanley during the class period, between August 5, 2003 and June 30, 2007. Seven of the Named Plaintiffs held the title of Financial Advisor; one Named Plaintiff held the title of Registered Financial Advisor Trainee. Each Named Plaintiff alleges that she suffered sex discrimination with respect to Morgan Stanley’s employment practices affecting compensation and career advancement – the same
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forms of sex discrimination claimed on behalf of members of the Settlement Class. (See Declarations of Joanne Augst-Johnson; Nancy Reeves; Debra Shaw; Cheryl Giustiniano; Laurie Blackburn; Erna Tarantino; and Elizabeth Reinke, filed with Plaintiffs’ Prelim. Mem. on April 24, 2007). Each Named Plaintiff would use the same legal theories to prove her claims. Accordingly, the typicality requirement is satisfied.
4. The Named Plaintiffs Are Adequate Representatives Under Rule 23(a)(4 The Rule 23(a)(4) adequacy requirement “aims to ensure that the named representatives do not have interests antagonistic to those of the class members they represent, and that they will vigorously pursue the claims of the class through qualified counsel.” Barnes v. District of Columbia, 242 F.R.D. 113, 122 (D.D.C. 2007).5 The interests of the Named Plaintiffs do not conflict with the interests of the other Class Members. The representative Named Plaintiffs have claims similar to the members of the Settlement Class and do not face unique overriding defenses. The Named Plaintiffs have aided Class Counsel in prosecuting the case by participating in Class Counsel’s investigation and providing input regarding the programmatic relief and the Settlement Agreement at various stages. (Mehri Decl., ¶ 7, 11, 15, 23). The Named Plaintiffs have fairly and adequately represented the interests of the Settlement Class in this case. B. The Proposed Settlement Class Satisfies Rule 23(b) In addition to satisfying all four Rule 23(a) requirements, the proposed Settlement Class also must satisfy the provisions of at least one of the three subsections of Rule 23(b). Fed. R. Civ. P. 23 (b). The Settlement Class meets this requirement, and was provisionally certified by

5

Although not addressed by the Court in Barnes, the adequacy of Plaintiffs’ counsel is no

longer evaluated under Rule 23(a)(4), but is now assessed under Rule 23(g). See Advisory

Committee Notes on 2003 Amendments, Subdivision (g) to Fed. R. Civ. P. 23(g).

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this Court under both Rule 23(b)(2) and (b)(3). Approval of a class under both subsections is consistent with Fed. R. Civ. P. 23(c)(4), which permits cases to be maintained as a class action with respect to particular issues, and has been approved by the D.C. Circuit. See Eubanks v. Billington, 110 F.3d 87, 96 (D.C. Cir. 1997) (permitting district court to adopt a "hybrid" approach, certifying a (b)(2) class as to the claims for declaratory or injunctive relief, and a (b)(3) class as to the claims for monetary relief, effectively granting (b)(3) protections including the right to opt out to class members at the monetary relief stage”); see also Barnes v. District of Columbia, 242 F.R.D. 113, 124 (D.D.C. 2007) (certifying a hybrid (b)(2) and (b)(3) class); Bynum v. District of Columbia, 217 F.R.D. 43, (D.D.C. 2003) (certifying two hybrid (b)(2) and (b)(3) classes).
Rule 23(b)(2) requires that the defendant has acted on grounds generally applicable to the Class, making final injunctive relief appropriate with respect to the Class as a whole. This requirement is met by a showing that the defendant “has acted in a consistent manner toward members of the class so that his actions may be viewed as part of a pattern of activity.” Barnes, 242 F.R.D. at 123 (internal quotations and citation omitted). Here, Morgan Stanley’s account distribution policies and other employment practices affecting compensation, as well as its policies and practices for selecting sales management, applied to all members of the Settlement Class. The programmatic relief agreed to in the Settlement Agreement will benefit all members of the Settlement Class who currently work for Morgan Stanley as well as female Financial Advisors and Registered Financial Advisor Trainees who will work there in the future. Class Counsel believes that this relief is as valuable as the monetary relief agreed to in the Settlement. Thus, with respect to the programmatic relief, certification under Rule 23(b)(2) is appropriate.
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The Settlement Class has also been provisionally certified pursuant to Rule 23(b)(3). It is appropriate to certify the Class under Rule 23(b)(3) insofar as Class Members seek and have collectively obtained monetary relief because common issues would predominate over purely individualized issues in the litigation over damages. The parties have agreed to an allocation formula using statistical earnings regressions models and a Claim Form designed to target distributions to those Class Members most harmed. Accordingly, some Class Members may believe that they are entitled to damages beyond those that may be afforded to them under this Settlement. By preliminarily certifying the Class under Rule 23(b)(3), the Court has afforded such Class Members the opportunity to opt-out of the monetary portion of the Settlement without releasing any of their claims. In fact, 29 Class Members have expressed a desire to opt-out of the Settlement. (Mehri Decl. ¶ 43). Class Members’ rights to exercise control over the damages aspects of their claims have thus been protected and final certification of this class as a hybrid (b)(2) and (b)(3) class is appropriate.6
C. Class Counsel Are Competent Under Rule 23(g) to Represent the Class Rule 23(g) requires the Court to appoint class counsel that are able to fairly and
adequately represent the interests of the Class. Fed. R. Civ. P. 23(g)(1). In appointing class counsel, the Court must consider: (1) the work counsel has done in identifying or investigating potential claims in the action; (2) counsel’s experience in handling class actions, other complex litigation, and claims of the type asserted in the action; and (3) counsel’s knowledge of the applicable law; (4) the resources counsel has committed to representing the class. The Court

6

Rule 23(b)(3) also requires that, to be approved, “a class action [be] superior to other

available methods for the fair and efficient adjudication of the controversy.” The Supreme

Court, however, has held that this superiority requirement is irrelevant in the context of a

settlement class. See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997).

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may also consider any other matters pertinent to counsel’s ability to fairly and adequately represent the interests of the class. Fed. R. Civ. P. 23(g)(1)(C); Bynum v. District of Columbia, 412 F. Supp. 2d 73, 78 (D.D.C. 2006).
Lead Class Counsel are competent and experienced employment class-action litigators who have achieved several significant employment discrimination settlements and have vigorously represented the interests of the Class Members in this matter. The declarations filed by Cyrus Mehri and Steven M. Sprenger on April 24, 2007 with Plaintiffs’ Preliminary Approval Memorandum describe in detail the extensive work by Class Counsel to investigate and pursue the claims of Class Members before the Settlement was reached and, on July 17, 2007, this Court found Class Counsel to be adequate representatives of the Class. Since then, Class Counsel have continued to devote substantial resources to representing the Class Members, including responding to Class Member inquiries regarding the Settlement and claims process, assisting the Named Plaintiffs and several Class Members with completion of their Claim Forms and working with SSI on the administration of the Settlement. (Mehri Decl., ¶ 38). Class Counsel are competent to represent the members of the Class and have fairly and adequately represented the interests of the Class. III. FINAL APPROVAL IS APPROPRIATE BECAUSE THE SETTLEMENT
AGREEMENT IS FAIR, REASONABLE AND ADEQUATE Rule 23(e) requires the Court to find that the proposed Settlement is “fair, reasonable, and
adequate.” Fed. R. Civ. P. 23(e)(1)(C). In this Circuit, “there is ‘no obligatory test’ that the Court must use to determine whether a settlement is fair, adequate and reasonable;” instead, the Court must consider the facts and circumstances of the case and exercise its discretion in determining whether it should approve a proposed settlement. Blackman v. District of Columbia, 454 F. Supp. 2d 1, 8 (D.D.C. 2006) (citing Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999)),
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aff’d 206 F.3d 1212 (D.C. Cir. 2000). Three judicial principles provide some guidance. First, the courts favor compromise of complex litigation to obviate the uncertainties of the outcome and to avoid wasteful litigation and expense. See, e.g., Mayfield v. Barr, 985 F.2d 1090, 1092 (D.C. Cir. 1993) (noting the “interest in encouraging settlements, particularly in class actions, which are often complex, drawn-out proceedings demanding a large share of finite judicial resources”); In re Vitamins Antitrust Litig., 305 F. Supp. 2d 100, 103 (D.D.C. 2004) (“‘principle of preference’ favoring and encouraging settlements” limits judicial discretion); Osher v. SCA Realty, Inc., 945 F. Supp. 298, 304 (D.D.C. 1996) (the general preference of courts for “resolution of disputes through voluntary compromise” is especially strong in the context of class actions “given the litigation expenses and judicial resources required in many such suits”) (internal citations omitted); Hammon v. Barry, 752 F. Supp. 1087, 1100 (D.D.C. 1990) (“particularly in class action suits, there is an overriding public interest in favor of settlement”); Luevano v. Campbell, 93 F.R.D. 68, 85 (D.D.C. 1981) (the “strong public policy in favor of the settlement of claims . . . is particularly important in the resolution of cases brought under Title VII of the Civil Rights Act of 1964, because of the ‘strong preference’ of Congress for ‘encouraging voluntary settlement of employment discrimination claims’”) (internal citations omitted).
Second, the purpose of requiring court approval of the settlement of a class action is to ensure that the interests of the non-party class members are protected. See Blackman v. District of Columbia, 454 F. Supp. 2d 1, 7-8 (D.D.C. 2006) (“in deciding whether to approve a proposed settlement, the Court must protect the interests of those unnamed class members whose rights may be affected by the settlement of the action”); Osher, 945 F. Supp. at 304 (the Court has “the duty of protecting absentee class members, which it executes by ‘assuring that the settlement
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represents adequate compensation for the release of the class claims’”). At the July 5, 2007 preliminary approval hearing, this Court proposed revisions to the Class Notice and Settlement Agreement that provided greater clarity for Class Members. Class Counsel implemented the Court’s proposed revisions before the Notice was distributed to Class Members.
Third, in evaluating a settlement under these principles, a court also should leave considerable discretion to the litigants and their counsel. United States v. District of Columbia, 933 F. Supp. 42, 46-47 (D.D.C. 1996) (“the function of the reviewing court is not to substitute its judgment for that of the parties to the decree, but to assure itself that the terms of the decree are fair and adequate and are not unlawful, unreasonable, or against public policy”); Hammon, 752 F. Supp. at 1093 (“a court deciding whether to approve a class action should not substitute its judgment for that of the proponents of the settlement”). Indeed, a presumption of fairness, adequacy, and reasonableness attaches to a class settlement that was reached after arm’s length negotiations between experienced, capable counsel after meaningful discovery. Blackman, 454 F. Supp. 2d at 8. As described in the Declarations from Lead Counsel Cyrus Mehri and Steven M. Sprenger filed with Plaintiffs’ Preliminary Approval Memorandum, this Settlement has been crafted by experienced class action attorneys after the exchange of extensive information that enabled both sides to evaluate the strengths and weaknesses of their respective positions.
Given the application of these factors to this case, the proposed settlement is fair, adequate and reasonable to class members in three crucial respects. First, it provides adequate relief from the defendant to the Class. Second, it provides a fair means for allocating the benefits between Named Plaintiffs and other Class Members. Finally, the response from the members of the Class has been overwhelmingly positive. Each of these factors will be discussed in greater detail below.
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A. The Settlement Provides Adequate Relief to the Class In assessing the fairness, adequacy and reasonableness of a settlement, “by far the most
important factor is a comparison of the terms of the compromise or settlement with the likely recovery the plaintiffs would realize if the case went to trial.” See Blackman v. Dist. of Columbia, 454 F. Supp. 2d 1, 8 (D.D.C. 2006); see also Pigford, 185 F.R.D. at 91; Thomas v. Albright, 139 F.3d 227, 231 (D.C. Cir. 1998). In this case, the Settlement provides significant programmatic and monetary relief to Class Members, far better than would likely have been possible in litigation.
As described briefly above and in more detail in Plaintiffs’ Preliminary Approval Memorandum, the programmatic relief is comprehensive, with provisions that address every significant issue raised by the Plaintiffs in the Amended Complaint: compensation, account assignments, mentoring programs, management job selection procedures, EEO investigative techniques and corporate accountability, monitoring and compliance, and enhanced programs and initiatives to promote opportunities for female Financial Advisors and Registered Financial Advisor Trainees. Systemic changes like these go far beyond the relief that is typically awarded by courts after trials in employment discrimination class cases. Class Counsel expects that the changes in Morgan Stanley’s employment practices contemplated in this Settlement will set an example for employers throughout the industry. (Mehri Decl., ¶ 17).
Likewise, the Settlement Fund is among the highest ever negotiated in the settlement of a gender discrimination class action. (Mehri Decl., ¶ 25). It will adequately compensate members of the Class for claimed losses. After deducting attorneys’ fees and the costs for settlement administration, the Settlement Fund will have approximately $32 million to distribute to Class Members who submit timely Claim Forms. (Mehri Decl., ¶ 34).
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The outstanding programmatic and monetary relief obtained for the Class makes approval of the Settlement appropriate, particularly when measured against the likely outcome if this case were litigated. The Named Plaintiffs and Class Members, as well as defendant, faced substantial risks in this case in addition to the risks, expenses and delay normally associated with employment discrimination class actions.7 First, the substantive law regarding the time period for which Named Plaintiffs and the Class can recover for disparities in compensation is in dispute, and both sides have strong legal arguments in their favor, making the case risky for the Named Plaintiffs, Class and the defendant. Second, the Settlement Class encompasses over 2,800 Financial Advisors and Registered Financial Advisor Trainees who have worked throughout the country at numerous locations. Both sides faced significant risks in trying to prove or contest a pattern of discrimination and the existence of company influence over the relevant personnel practices necessary to certify a nationwide class and successfully establish class liability. Third, the Named Plaintiffs intended to seek recovery of both economic and compensatory damages on behalf of all Class Members should litigation have commenced, and defendant intended to seek to limit the potential scope of recovery.
Finally, an analysis done by Professor Stewart J. Schwab, Dean of Cornell Law School, of employment discrimination cases filed in the federal courts reveals that employment discrimination plaintiffs face a more difficult time in every stage of litigation than virtually any other category of cases. (See Stewart J. Schwab, How Employment Discrimination Cases Fare

7

Both sides recognize that, regardless of the outcome, litigation would be protracted and

expensive, especially if the litigation preceded through a full-scale liability trial and a large

number of individual damages hearings. See, e.g. Freeport Partners, LLC v. Allbritton, 2006

U.S. Dist. LEXIS 9710 at *29-30 (D.D.C. March 13, 2006) (holding that early settlement that

saved the class substantial money in attorneys’ and expert fees, as well as avoiding the delay and

uncertainty of litigation is a fact that “must weigh heavily” in favor of settlement approval);

Pigford v. Glickman, 185 F.R.D. 82, 104 (D.D.C. 1999).

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in the Federal Courts: An Empirical Analysis, attached as Exhibit B to Mehri Decl.). Dean Schwab found that 61 percent of employment discrimination cases are decided on pretrial motions in the defendant’s favor. (Id. at 1). Employment discrimination plaintiffs win only 28.1 percent of trials. (Id. at 1). When an employment discrimination plaintiff wins at trial and the defendant appeals the judgment, the judgment is more likely to be reversed (42 percent of the time) than in almost any other category of cases. (Id. at 2). Considering the likelihood of losing a dispositive pretrial motion, the low win rate at trial, the high likelihood that a plaintiff’s trial win will be appealed by the defendant, the high rate of reversal of plaintiffs’ trial wins, and a generally low median award for employment discrimination plaintiffs, Professor Schwab projects that the value of a typical individual discrimination case is between $6,536 and $9,648. (Id. at 5). Therefore, this Settlement is a far better result for Class Members than proceeding with the typical employment discrimination litigation.
For all of these reasons, the Settlement is fair, adequate and reasonable in the quantum of relief it provides to Class Members.
B. The Settlement Is Fair in the Allocation of Benefits Between Named Plaintiffs and Class Members With respect to monetary relief, the Settlement provides for the allocation of a portion of
the Settlement Fund to Class Members who timely submit Claim Forms. (Settlement Agreement, § VIII.C). Monies will be allocated to Class Members based on an Earnings Regression model and information provided on a Claim Form and by Class Counsel. Class Members, including Named Plaintiffs, are entitled to consideration of their contributions to the prosecution of the litigation. In addition, Named Plaintiffs are entitled to consideration of their release of individual claims beyond the scope of the class-wide claims of sex discrimination if they decide to release such claims. (Id., § VIII.D). After reviewing the Claim Form
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submissions, the Special Master will recommend and submit an allocation plan to the Court for approval. No awards will be paid until Court approval is obtained. (Id., § VIII.E).
The Court may exercise its authority to review the recommended awards to insure that the interests of Class Members are fully protected pursuant to Fed. R. Civ. P. 23(d). An allocation plan that is subject to court scrutiny is fair and reasonable even though the precise details of the formula are not spelled out in the settlement itself. See In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 170 (2d Cir. 1987) (where court assessed overall fairness of settlement prior to adoption of distribution scheme, and where defendant’s obligations under settlement agreement are not an issue, distribution scheme need not be finalized prior to final approval of class settlement); In re Corrugated Container Antitrust Litigation, 643 F.2d 195, 224 (5th Cir. 1981) (sustaining district court’s approval of settlement notice even though amount each class member could expect to receive not yet determined); Bynum v. District of Columbia, 412 F. Supp. 2d 73, 76 (D.D.C. 2006) (proposed method of allocating a sum certain for distribution to all class members who filed claims held to be fair, even though class members would not know exact size of award until after all claims had been processed).
C. The Response From Members of the Class Has Been Overwhelmingly Positive and Demonstrates that the Settlement Is Fair 1. The Vast Majority of Class Members Support the Settlement The reaction of Class Members to the Settlement, as evidenced by the number of
objections, opt-outs, and claim forms submitted, has been overwhelmingly positive. Class Counsel and the Claims Administrator have received 907 Claim Forms, only 29 opt-outs,8 and only two objections from Class Members. (Mehri Decl., ¶ 42-43, 46; Patton Decl., ¶ 6). Class Members are voting overwhelmingly in favor of the Settlement and this response strongly

8

This number includes opt-outs received after the September 10, 2007 deadline.

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supports final approval of the Settlement. See, e.g. Bynum v. District of Columbia, 412 F. Supp. 2d 73, 77 (D.D.C. 2006); In re Lorazepam & Clorazepate Antitrust Litig., 205 F.R.D. 369, 378 (D.D.C. 2002). In addition, Class Counsel have received numerous calls from Class Members who have a favorable view of the Settlement. (Mehri Decl., ¶ 41).
The Court’s Preliminary Approval Order required all opt-outs and objections to be sent to both Lead Class Counsel and counsel for Morgan Stanley and received by September 10, 2007. As of October 1, 2007, Class Counsel has received 29 requests to opt-out of the Settlement – only one percent of the total Class Members. (Mehri Decl., ¶ 43).
As of October 1, 2007, Class Counsel has received two objections to the Settlement, and a third person, who is not a Class Member, has submitted a purported objection. The low number of opt-outs and objections supports the conclusion that the Settlement is favorably viewed by well over the majority of the Class Members. Bynum, 412 F. Supp. 2d at 77; In re Lorazepam, 205 F.R.D. at 378. No currently-employed Class Members have claimed that any part of the Settlement is unfair to Class Members. In any event, none of the objections provides sufficient reason to question the fairness, adequacy or reasonableness of the Settlement.
2. The Few Objections Received Are Without Merit a. The Objection of Mary Harris Evans Should Be Overruled
The objection of Mary Harris Evans is not a proper objection for two reasons. First, Ms. Evans stated in her letter that she is an Assistant Branch Manager in Morgan Stanley’s Menlo Park branch office. (Objection/Opt-out of Mary Harris Evans, at 1, attached at Exhibit G to Mehri Decl.). Assistant Branch Managers are not part of the Settlement Class in this case, and Class Counsel’s review of the list of Class Members provided by Morgan Stanley confirms that Ms. Evans is not a Class Member. (Mehri Decl., ¶ 46). As Ms. Evans is not a Class Member,
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she has no standing to object to this Settlement. Mayfield v. Barr, 985 F.2d 1090, 1092 (D.C. Cir. 1993).
Second, Ms. Evans also specifically stated that if she were considered a Class Member, she wished to opt out of the Settlement. (Evans Objection/Opt-out, at 2). Class Members who opt out are not entitled to object to the Settlement. Id. Although there is an exception to this general rule that is recognized for non-settling parties who demonstrate “prejudice” from the settlement, id., at 1093, Ms. Evans’ objection/opt-out does not demonstrate any prejudice to her by her being excluded from the Class. Ms. Evans simply states that as a “producing” Assistant Branch Manager, she has been and is subjected to gender discrimination. (Evans Objection/Optout, at 1-2). This is not persuasive. The far-reaching programmatic relief that Morgan Stanley will implement as a result of this Settlement will benefit all employees at Morgan Stanley, including female “producing” Assistant Branch Managers. Further, the type of prejudice that entitles a non-class member to object to a proposed settlement means “‘plain legal prejudice,” as when ‘the settlement strips the party of a legal claim or cause of action.’” Mayfield, 985 F.2d 1090, 1093. Ms. Evans will not be stripped of any legal claim or cause of action by this Settlement – since she is not a Class Member, she has not released any of her claims and remains free to bring her own gender discrimination case, if she so desires.9
b. The Objection of Jennifer Cropper Should Be Overruled The objection of Jennifer Cropper does not challenge the fairness, adequacy, or reasonableness of the proposed Settlement. Ms. Cropper simply states in her objection that she

9

Ms. Evans also states that she agrees with the objection of Janice Grant. (Evans

Objection/Opt-Out, at 2). Ms. Grant also raises the concern about the exclusion of Assistant

Branch Managers from the Class; Named Plaintiffs address the merits of this objection infra on

p. 28-29.

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“neither experienced nor witnessed any form of discrimination,” and that Morgan Stanley made “every possible resource” available to female Financial Advisors to assist them. (Objection of Jennifer Cropper, attached as Exhibit E to Mehri Decl.). If Ms. Cropper does not feel she was discriminated against at Morgan Stanley, she is not forced to file a claim. She has, however, identified nothing in her objection that would make the proposed Settlement unfair, inadequate, or unreasonable for the Named Plaintiffs and Class Members who believe they have been discriminated against at Morgan Stanley. Indeed, Ms. Cropper’s objection underscores the challenges Plaintiffs would face if they pursued litigation instead of settlement in this case.
c. The Objection of Janice Grant Should Be Overruled Janice Grant, a former Registered Financial Advisor Trainee, submitted a lengthy objection to the Court and Class Counsel. However, Ms. Grant’s objection is invalid because it does not follow the instructions for submitting objections to this Court. Bynum, 412 F. Supp. 2d at 76 (letters complaining about aspects of settlement that did not comply with procedure for making objections were not treated by court as objections). The Class Notice clearly stated that in order for a Class Member to either speak at the fairness hearing or have her objection considered by this Court, she must submit her objection in writing, with a detailed description of the basis for her objection. (Notice of Class Action, Proposed Settlement Agreement, and Settlement Hearing, at p. 8 (hereinafter the “Class Notice”)). Copies of any objections must also be submitted to Lead Class Counsel and counsel for Morgan Stanley. (Id. at 9). The copy of Ms. Grant’s objection received by Lead Class Counsel included a nearly blank page, with the words “I submit the following paragraph confidentially to the Court” at the top of the page and a “REDACTED” stamp at the bottom of the page. (Objections of Janice Grant to Proposed Settlement and Notice of Intent to Appear at Settlement Fairness Hearing, at 7
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(hereinafter “Grant Objection”), attached as Exhibit F to Mehri Decl.). The purpose of requiring objections to be submitted before the Fairness Hearing is so that counsel for the class has an opportunity to respond to the objections. Class Counsel cannot possibly respond to the redacted portion of Ms. Grant’s objection. Moreover, to the extent Ms. Grant’s attorney instructed or encouraged her to submit information to the Court that was not shared with Class Counsel or counsel for Morgan Stanley, this conduct violates the District of Columbia and Illinois Rules of Professional Conduct, which prohibit ex parte communication with the Court. See D.C. R. Prof. Conduct 3.5; Ill. R. Prof. Conduct 3.5(i).
In addition, Ms. Grant states that she plans to raise additional objections to the proposed Settlement at the Fairness Hearing that she does not identify in her written objection. (Grant Objection, at 9). However, the Class Notice instructions were clear that no objections may be raised at the Settlement Hearing that were not first submitted to the Court, Lead Class Counsel, and counsel for Morgan Stanley by September 10, 2007. (Class Notice, at 9). Ms. Grant is therefore precluded from raising any objections at the Fairness Hearing that are not contained within the version of her objection received by Lead Class Counsel.
Even if Ms. Grant’s objection is valid, it lacks merit. Ms. Grant was never a Financial Advisor at Morgan Stanley. She was a Registered Financial Advisor Trainee for only seven months, from February 2004 until September 2004. (Dichter Decl., ¶ 12). The grounds for Ms. Grant’s objection fall into four general categories of complaints: (a) that the monetary relief is inadequate; (b) that the Class definition is “unfairly restrictive;” (c) that the notice and claims process was inadequate; and (d) that the injunctive relief is inadequate. Each category is addressed in turn.
i. The Monetary Relief Is Not Inadequate
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Ms. Grant believes that the “best test” for whether a settlement is fair to the Class is whether, in the absence of any “extra” awards or payments, the Named Plaintiffs would have settled their claims. (Grant Objection, at 6). Ms. Grant misunderstands the legal test for evaluating the fairness of a settlement, and the reasons justifying the fairness, adequacy and reasonableness of the monetary relief in this Settlement have been extensively briefed supra and in Plaintiffs’ Preliminary Approval Memorandum. In any event, the Named Plaintiffs agreed to the same distribution process that applies to all Class Members. Like Class Members, the Named Plaintiffs will not know the amount of their awards until the Special Master has recommended an allocation plan and the Court has approved it.
Ms. Grant also appears to have not read or has misunderstood the description of the monetary fund. All Class Members, not just the Named Plaintiffs, are entitled to consideration of their contributions to the prosecution of the litigation. The Named Plaintiffs are entitled to additional consideration if they decide to release their individual non-class claims, but the total amount of the settlement was negotiated with the intent of covering those claims and the amount of the fund agreed upon is sufficiently large to do so.10 Contrary to Ms. Grant’s belief, Financial Advisor Trainees, like Ms. Grant, are eligible for awards from both the Earnings Regression and the Claim Form components of the allocation formula, to the same extent as Financial Advisors. There will be a separate Earnings Regression analysis for Registered Financial Advisor Trainees.
The Earnings Regression component will provide an award to any Class Member whose annual earnings in any year during the liability period fall below an annual earnings curve which is set at two standard deviations above the mean earnings curve for male Financial Advisors and
10 Awarding additional money to named plaintiffs for their individualized damages is a common feature in class settlements. See, e.g, Bynum, 412 F. Supp. 2d at 80-81.
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male Registered Financial Advisor Trainees. (Settlement Agreement, § VIII.D.1). Two standard deviations above the mean earnings curve for male Financial Advisors is approximately the highest-earning 5% of male peers. (Mehri Decl., ¶ 27). Based on Class Counsel’s review of Morgan Stanley’s employment and payroll data, very few, if any, Class Members will have earned enough money to be excluded from an award under the Earnings Regression component. (Id., ¶ 27). Even those Class Members who do not receive an award under the Earnings Regression component may still be eligible for an award under the Claim Form component. Indeed, the claims procedure in this Settlement will provide for significantly expedited relief for Class Members. This is an enormous benefit that compares favorably with other settlements, particularly in this industry, where class members have been required to prosecute and succeed at individual mini-trials in order to recover a monetary award. (Id., ¶ 25). If this case were handled in a similar fashion, it is likely that many of the claimants could not successfully prosecute such a mini-trial – as has happened to numerous claimants in similar settlement arrangements in this industry. (Id.). This would result in large numbers of claimants receiving nothing, a situation that will not occur here. (Id.).
Ms. Grant describes several other cases which she claims settled for a much larger amount of money than provided for in this Settlement. (Grant Objection, at 3-4). The cases she mentions involved different facts, different claims, and different class members. Ms. Grant is either uninformed or mistaken about the justifications for and actual cash value received by class members in those cases. (Dichter Decl., ¶¶ 15-18; Mehri Decl., ¶¶ 47-48). Similarly, Ms. Grant’s calculation of the maximum monetary award that will be available to Class Members (Grant Objection, at 3), is far too simplistic and is mistaken. The monetary funds will be distributed only to Class Members who file timely and valid claims. To date, SSI has received
27

Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 33 of 39
907 Claim Forms. (Patton Decl., ¶ 8). As described above, after deducting attorneys’ fees and settlement administration costs, the Settlement Fund will have approximately $32 million to divide among these Class Members, based upon the result of the Earnings Regression analysis and the answers on their Claim Forms. (Mehri Decl., ¶ 34).
In any event, the crux of Ms. Grant’s objection is that she believes Class Members should receive more money than they likely will in this Settlement. However, the Court should not reject a settlement simply because a single class member complains that the Class should have received more money. Thomas v. Albright, 139 F.3d 227, 231 (D.C. Cir. 1998); In re Lorazepam, 205 F.R.D. at 379. Indeed, “[p]utting a monetary value on the damage done to someone who has experienced discrimination…obviously is no easy matter, and it is probable that no amount of money can fully compensate class members for past acts of discrimination.” Pigford, 185 F.R.D. at 108. The monetary fund in the proposed Settlement is fair, adequate and reasonable, especially when juxtaposed with the risks and uncertainty of continued litigation.
ii. The Class Definition Is Not “Unfairly Restrictive” Ms. Grant contends that the class definition should be expanded to include Morgan Stanley employees who manage retail books of business but also have managerial titles or responsibilities. (Grant Objection, at 11). Ms. Grant again misunderstands the law related to class actions and class settlements. First, this case does not have a Named Plaintiff with managerial responsibilities who could represent the interests of these excluded employees.11 These employees are not represented and their claims are not released by this Settlement. Second, Ms. Grant herself points out that these managerial positions also manage retail books of business. (Id.) To the extent these “producing” managers play any role in the
11 Ms. Grant does not have standing to represent such excluded employees either.
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assignment of accounts or other decisions which could affect the earnings of Financial Advisors, there exists a potential for conflict between their interests and the interests of the rest of the Class. In fact, many women Financial Advisors reported to Class Counsel that managers at Morgan Stanley made decisions directing accounts to themselves. (Mehri Decl., ¶ 14). Plaintiffs did not include managers and assistant managers in their investigation precisely because of this potential conflict. (Id.).
Finally, as explained above in response to Ms. Evans’ Objection/Opt-out, if any female Sales Managers or Assistant Managers feel they have been discriminated against, this Settlement does not take away their right to bring claims based on these allegations.
iii. The Notice and Claims Process Was Adequate Ms. Grant expresses concern that Class Members who are former employees may not have received the Notice with enough time to determine whether to object, opt-out, or file a claim. (Grant Objection, at 11). This Court approved the Notice and the timeframe for the required responses as adequate notice to the Class. (Prelim. App. Order, July 17, 2007). The notice packages were mailed on July 27, 2007, which allowed Class Members 45 days to determine whether to object or opt-out. (Patton Decl., ¶ 5). The deadline for submitting Claim Forms gave Class Members an additional 14 days to complete and submit their claims. The notice package was also available though the case website and the websites of Class Counsel. In addition, the case and Settlement have been covered timely and significantly in the media, which increased the likelihood that former employees would learn of it. (Mehri Decl., ¶ 36-37). Indeed, Ms. Grant claims to have learned of the Settlement from press reports about it. (Grant Objection, at 11). The notice program was more than adequate to inform Class Members of the Settlement and their rights in relation to it. Class Members’ due process rights were sufficiently
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and fairly protected by the notice process employed here. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 848 (1999).
As discussed above, 316 notice packages were returned as undeliverable, but all have been remailed. (Patton Decl., ¶ 8). The bright yellow insert encouraged Class Members to contact Class Counsel if they believed they would have trouble meeting any of the deadlines. (Id.). Only approximately 25 of these Class Members contacted Class Counsel and none indicated a desire to object to the fairness of the Settlement. (Mehri Decl., ¶ 40). Class Counsel has no objection to allowing those Class Members who wish to opt out to do so, if they sign an affidavit or declaration pursuant to 28 U.S.C. § 1746 testifying that they received the remailed notice package after the deadline to opt out.
iv. The Injunctive Relief Is Fair and Adequate Ms. Grant claims the programmatic relief achieved in this Settlement is “grossly inadequate” and will discriminate against African-Americans. (Grant Objection, at 8-11). The far-reaching and comprehensive changes Morgan Stanley has agreed to make have been described in detail in this brief and in Plaintiffs’ Preliminary Approval Memorandum. The changes will not only benefit women Financial Advisors and Financial Advisor Trainees, but also other protected groups at Morgan Stanley. (Mehri Decl., ¶ 18-25, 31). Among other things, the account distribution system will be modified to reduce reliance on historical performance (which Named Plaintiff allege favors male brokers) and to ensure that business opportunities are distributed on the basis of merit and current performance. (Id., ¶ 18-20). In fact, the National Council of Women’s Organizations, a nonpartisan, nonprofit coalition of 220 member organizations that address issues of concern to women has expressed wholehearted support for the Settlement and the programmatic relief contained in it. (Id., ¶ 3).
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Most of Ms. Grant’s criticism is related to another class action against Morgan Stanley, Jaffe v. Morgan Stanley, Case No. 06-3903, filed by other counsel in the Northern District of California, who recently announced that they entered into a race class action settlement with Morgan Stanley. Ms. Grant’s objection is therefore really an objection in that case, which she will have an opportunity to make if and when the plaintiffs in the case submit their proposed settlement for approval.
Ms. Grant’s remaining criticisms of the programmatic relief in this case are not sufficient reason to reject this Settlement. First, Ms. Grant is mistaken when she claims that the revised Power Rankings have not been “back-tested” for disparate impact on African Americans. (Grant Objection, at 8). Morgan Stanley did indeed “back-test” the revised Power Rankings and found no adverse impact on either women or African Americans. (Dichter Decl., ¶ 22).
Second, Ms. Grant is mistaken when she claims that the Settlement Agreement “makes no meaningful attempt to address the issues of partnerships.” (Grant Objection, at 9). The Settlement ensures that partnerships are not formed as a way of circumventing the regular account distribution process (Settlement Agreement, § VII.C.5.a and VII.C.7), and instructs the jointly appointed Industrial Psychologists to make recommendations for increasing the participation of women in partnerships. (Id., at § VII.C.5.b and VII.F.2.). Ms. Grant is again mistaken when she complains that the Industrial Psychologists have no authority to implement meaningful reform. (Grant Objection, at 10). The Industrial Psychologists have access to, and in fact are instructed to, present their recommendations to senior executives at Morgan Stanley, including, if necessary, the Chief Operating Officer and President of Morgan Stanley. (Settlement Agreement, § VII.F.2.b).
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Finally, Ms. Grant misunderstands the enforcement provisions of this Settlement Agreement. The provision limiting enforcement of the Agreement to Class Counsel is typical of class settlements like this one, and any Class Member who believes Morgan Stanley is not abiding by the terms of the Agreement may contact Class Counsel at any time during the term of the Agreement to discuss her concerns. The arbitration provision is related to enforcing the Settlement Agreement itself. (Settlement Agreement, § X.B). Morgan Stanley does not have a mandatory arbitration policy. (Dichter Decl., ¶ 23). The Settlement Agreement provides that disputes related to account distributions shall initially go through Morgan Stanley’s alternative dispute resolution mechanism, but nothing in the Settlement Agreement prevents a Class Member from “pursuing any legal claim not released under the Settlement through any applicable governmental agency or court of law if she is otherwise entitled to do so.” (Settlement Agreement, § VII.C.8).
Although Ms. Grant raises numerous issues in her 12-page objection, none of her arguments provide a basis to reject the proposed Settlement. IV. THE COURT SHOULD ENTER ADMINISTRATIVE ORDER NO. 2
On July 27, 2007, Morgan Stanley paid the sum of $46 million by wire transfer to the Settlement Fund. The terms of the Settlement provide that this sum will be allocated to cover all amounts paid to Class Members, including Named Plaintiffs; all attorneys’ fees and costs awarded by this Court; and all costs in connection with administering the Settlement Fund. Administrative Order No. 1 established a Claims Portion and a Fees Portion of the Settlement Fund. The Fund must be allocated appropriately between these portions in manner consistent with the Attorneys’ Fees Motion made by Class Counsel. In order to properly allocate the Fund, the parties request the Court to enter proposed Administrative Order No. 2. It provides for the
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Case 1:06-cv-01142-RWR Document 33-2 Filed 10/01/2007 Page 38 of 39 allocation of the Settlement Fund portions and is consistent with the Settlement Agreement and practices in other class action settlements in this District.
V. CONCLUSION For all the foregoing reasons, the Named Plaintiffs request that the Court certify the
proposed Settlement Class, find that Class Counsel complied with the notice provisions of the Preliminary Approval Order, issue the proposed Findings of Fact, Conclusions of Law and Order granting final approval to the Settlement, and enter the parties’ jointly proposed Administrative Order No. 2 to enable the proper allocation of settlement monies among the portions of the Settlement Fund and provide for the payment of attorneys’ fees and costs.
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Dated: October 1, 2007

Respectfully submitted,
/s/ Cyrus Mehri Cyrus Mehri (DC No. 420970) Steven A. Skalet (DC No. 359804) Lisa M. Bornstein (DC No. 485933) Anna M. Pohl (DC No. 489407) MEHRI & SKALET, PLLC 1250 Connecticut Ave. NW Suite 300 Washington, DC 20036 (202)822-5100
Steven M. Sprenger (DC No. 418736) SPRENGER & LANG, PLLC 1400 Eye Street, N.W. Suite 500 Washington, DC 20005 (202) 265-8010
Mara R. Thompson (Pro Hac Vice) SPRENGER & LANG, PLLC 310 Fourth Avenue S. Suite 600 Minneapolis, MN 55415 (612) 871-8910
Christopher M. Moody (Pro Hac Vice) Whitney Warner (Pro Hac Vice) MOODY & WARNER, P.C. 4169 Montgomery Blvd. NE Albuquerque, NM 87109 (505)944-0033
Attorneys for Plaintiffs and the Class

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 Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 1 of 50

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves, Debra Shaw, Jan Tyler, Cheryl Giustiniano, Laurie Blackburn, Ema Tarantino, and Elizabeth Reinke, on behalf ofthemselves and all others similarly situated,
Plaintiffs,
v.
Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc.,
Defendant.
Renee Fassbender Amochaev, Deborah Orlando, Kathryn N. Varner and Ivy So, on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
Citigroup Global Markets, Inc., d/b/a/ Smith Barney,
Defendant.

Case No. 1:06-cv-01142 (RWR) CLASS ACTION
Case No. C-05-1298 PJH (N.D. Cal.) CLASS ACTION

MORGAN STANLEY SMITH BARNEY. LLC CONSOLIDATED SETTLEMENT AGREEMENT

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 2 of 50
TABLE OF CONTENTS
I. INTRODUCTION .................................................................................................... ! II. BACKGROUND ...................................................................................................... !
A. The Morgan Stanley Action .......................................................................... I B. The Smith Barney Action ............................................................................. 6 C. Morgan Stanley Smith Barney Joint Venture ............................................... 9 III. GENERAL TERMS OF THE SETTLEMENT AGREEMENT ............................ 10 A. Defmitions................................................................................................... l 0 B. Duration of the Settlement .......................................................................... l2 C. Cooperation................................................................................................. l2 D. Jurisdiction and Venue................................................................................ l2 E. Effect on Morgan Stanley and Smith Barney Settlement Agreements ....... 13 IV. NO ADMISSION, NO DETERMINATION.......................................................... 13 V. PROGRAMMATIC RELIEF ................................................................................. 14 A. Communications ......................................................................................... 14 B. Branch Management ................................................................................... 15 C. Account Re-Distribution ............................................................................. !? D. Development Opportunities ........................................................................28 E. Complaint Process and Training ................................................................. 29 F. Appointments .............................................................................................. 30 G. General Non-Discrimination Provisions ..................................................... 36 VI. MONITORING ....................................................................................................... 37 A. Data Collection ........................................................................................... 37 B. Monitoring System......................................................................................38 C. Reports ........................................................................................................ 38 D. Meetings......................................................................................................38 VII. ENFORCEMENT ................................................................................................... 38 A. No Third Parties .......................................................................................... 38 B. Dispute Resolution ...................................................................................... 38 VIII. CONFIDENTIALITY.............................................................................................39 A. Documents and Information Produced by Morgan Stanley, Smith Barney,
MSSB and Class Counse1 ........................................................................... 39 B. Return or Disposal of Confidential Documents and Information...............39
-i-

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 3 of 50 IX. GOVERNINGLAW...............................................................................................41 X. OTHER CONDITIONS OF SETTLEMENT ........................................................ .42
A. Notices to Counsel ...................................................................................... 42 B. Failure to Insist on Strict Compliance ........................................................42 C. Consolidated Settlement Agreement Binding.............................................42 D. No Drafting Presumption............................................................................43 E. Dispute As To Meaning of Agreement Terms............................................43 F. Interpretation of Terms ...............................................................................43 G. Paragraph and Section Headings .............................................................. ..43 H. Counterparts ................................................................................................43 I. Agreement Binding .....................................................................................43
-ii-

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I. INTRODUCTION Subject to approval by the United States District Court for the District of Columbia
(the "Court"), this Consolidated Settlement Agreement ("Consolidated Settlement Agreement," "Settlement" or "Agreement") sets forth the full and final terms by which the Named Plaintiffs inAugst-Johnson, et al. v. Morgan Stanley & Co., Incorporated, formerly known as Morgan Stanley DW Inc., Case No. 1:06-cv-01142 (RWR) (D.D.C.) ("Morgan Stanley Action") and Amochaev, et al. v. Citigroup Global Markets, Inc., d/b/a Smith Barney, Case No. C-05-1298 PJH (N.D.Cal.) ("Smith Barney Action"), on behalf of themselves and members of the Class defined herein, and Morgan Stanley Smith Barney LLC ("MSSB", "Firm" or "Company") 1 have consolidated the remaining obligations set forth in the Morgan Stanley and Smith Barney Settlement Agreements defined herein. This Settlement applies to women Financial Advisors and Registered Financial Advisor Associates employed by MSSB.
II. BACKGROUND A. The Morgan Stanley Action I. Beginning in early 2005, Joanne Augst-Johnson, Nancy Reeves,
Debra Shaw, Jan Tyler, Cheryl Giustiniano, Laurie Blackburn, Ema Tarantino, and Elizabeth Reinke (the "Morgan Stanley Named Plaintiffs") retained counsel ("Morgan Stanley Class Counsel") to investigate claims of sex discrimination in the Global Wealth Management Group of Morgan Stanley ("MS-GWMG"). Those Morgan Stanley Named
1 As discussed in Section II, infra, after the Morgan Stanley and Smith Barney actions were resolved via Settlement Agreements executed in July 2007 and April 2008, respectively, Morgan Stanley & Co. Incorporated ("Morgan Stanley'') and Citigroup Inc. ("Citigroup") entered into a joint ventore which combined Morgan Stanley's Global Wealth Management Group with Citigroup's Smith Barney. The combined entity, Morgan Stanley Smith Barney LLC, is now the employer of the currently employed class members covered by the Morgan Stanley and Smith Barney Settlement agreements.
1

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Plaintiffs each filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging, among other things, that MS-GWMG discriminated against them and a class of similarly situated persons throughout the United States on the basis oftheir sex in several aspects oftheir employment.
2. On June 22, 2006, the Morgan Stanley Named Plaintiffs filed a Complaint in the Court on behalf of themselves as individuals and on behalf of a nationwide class of women employees against Morgan Stanley pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq., ("Title VII"), and under parallel state and local laws prohibiting sex discrimination. In April 2007, the Named Plaintiffs filed an Amended Complaint naming Morgan Stanley & Co. Incorporated, the successor to Morgan Stanley DW Inc., as Defendant. In that Action, titled Augst-Johnson. et al. v. Morgan Stanley & Co. Incorporated, Civil Action No. 1:06cv-01142 (RWR), the Morgan Stanley Named Plaintiffs, among other things, alleged, on behalf of themselves and members of the Class defined herein, that they were women who were employed with MS-GWMG as Financial Advisors or Registered Financial Advisor Trainees, that they had been afforded fewer business opportunities than comparable male Financial Advisors and comparable male Registered Financial Advisor Trainees, and that they experienced sex discrimination in numerous aspects of their employment. They further alleged, on behalf of themselves and members of the Class defined herein, that aspects of their employment in which they had experienced sex discrimination included, but were not limited to, career advancement, distribution of accounts, work assignments, compensation, and/or other terms and conditions of employment and/or termination. In addition to these class claims, the Morgan Stanley Named Plaintiffs asserted various
2

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individual, non-class claims, including, for some, age discrimination, as set forth in the Amended Complaint.
3. On November 13, 2006, Morgan Stanley filed its answer and its affirmative defenses to the Complaint, denying that it engaged in a pattern or practice of sex discrimination against the Named Plaintiffs or any similarly situated current and former women Financial Advisors or Registered Financial Advisor Trainees. Morgan Stanley denied the allegations in the administrative charges, the Complaint and the Amended Complaint, and in connection therewith denied any liability under Title Vll of the Civil Rights Act of 1964, as amended, or any other federal, state or local laws, and specifically denied that Morgan Stanley unlawfully discriminated against Plaintiffs or Class Members on the basis of sex, or that Plaintiffs or Class Members are otherwise entitled to the relief requested.
4. In an effort to determine whether the parties could settle this dispute prior to the commencement of litigation, the parties' counsel, who were experienced class action attorneys, participated in detailed and exhaustive discussions and negotiations over the course of two years. The parties engaged the services of Hunter Hughes, Esq., a highly experienced professional mediator, skilled in mediation of complex class actions, including employment discrimination litigation. Mr. Hughes became familiar with the case and conducted over ten mediation sessions between the parties. Those formal mediation sessions and follow-up settlement discussions between the parties concluded with the execution of a Settlement Agreement (the "Morgan Stanley Settlement Agreement"). During the negotiations, counsel bargained vigorously on behalf of their clients. All negotiations were conducted at arms' length and in good faith.
3

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 7 of 50
5. In order to facilitate settlement discussions, the parties executed tolling agreements covering the time period from December 27, 2004 to June 22, 2006, at which point the Complaint in this Action was filed.
6. For settlement purposes, Morgan Stanley Class Counsel sought, and Morgan Stanley produced, voluminous data and other information concerning MSGWMG's workforce and work practices relevant to the claims asserted and damages sought by Plaintiffs and the Class. Class Counsel interviewed over 200 Class Members during the course of their investigation and retained an expert to conduct statistical analyses of the data. The expert worked with Class Counsel to review the data, ensure it was complete, request supplemental data, and analyze the data. The expert also conducted studies similar to those that would have been conducted in preparation for the trial of this matter. Class Counsel also retained a second expert to assist in analyzing industry practices and to provide input on crafting injunctive relief. Counsel for the parties have also conducted their own substantial investigations of the matter, including the facts underlying the claims and issues raised in the charges, the Complaint and the Amended Complaint. The investigations included, among other things, interviewing Class Member witnesses and reviewing a substantial number of relevant company records. As a result of the exchange of information, the investigation, and other activity both prior to and after filing the Complaint, counsel for the parties are familiar with the strengths and weaknesses of their respective positions, and have had a full opportunity to assess the litigation risks presented in this case.
7. All parties and their counsel recognized that, in the absence of an approved settlement, they faced a long litigation course, including motions to dismiss,
4

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motions for class certification, formal discovery, motions for summary judgment, and trial and appellate proceedings that would consume time and resources and present each of them with ongoing litigation risks and uncertainties. The parties wished to avoid these risks and uncertainties, as well as the consumption of time and resources, through settlement pursuant to the terms and conditions of the Morgan Stanley Settlement Agreement, which included the provision of monetary and programmatic relief. Morgan Stanley Class Counsel believed that the terms of the Morgan Stanley Settlement Agreement were in the best interests of the Class and were fair, reasonable, and adequate, and Morgan Stanley wished to bring the litigation to a conclusion on the terms set forth in the Morgan Stanley Settlement Agreement.
8. Without any admission or concession by Morgan Stanley of any liability or wrongdoing with respect to the allegations in any administrative charge or in the Complaint and the Amended Complaint, all released claims were finally and fully compromised, settled, and released subject to the terms and conditions of the Morgan Stanley Settlement Agreement, which were the subject of negotiation and agreement by the parties.
9. On July 17, 2007, the United States District Court for the District of Columbia granted the parties' Joint Motion for Preliminary Approval of Class Action Settlement Agreement.
10. On October 26, 2007, the United States District Court for the District of Columbia granted final approval of the Morgan Stanley Settlement Agreement.
11. Morgan Stanley has satisfied all obligations relating to the monetary relief provisions set forth in the Morgan Stanley Settlement Agreement.
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B. The Smith Barney Action 1. The Smith Barney Class Action Complaint was filed on March 31,
2005 in the Northern District of California. The Complaint, filed by four named plaintiffs (the "Smith Barney Named Plaintiffs"),2 asserted claims on behalf of a class of all women employed as Financial Advisors in (i) the United States branches of Smith Barney's retail brokerage division at any time from August 30, 2003 forward or (ii) the California branches of Smith Barney's retail brokerage division at any time from June 25, 2003 forward. The Complaint asserted claims for gender discrimination under Title Vll of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq., and, with respect to California Class Members, the California Fair Employment and Housing Act, Cal. Gov't Code § 12940 ("FEHA''). On November 9, 2006, pursuant to Stipulation, the Smith Barney Named Plaintiffs filed a First Amended Complaint that alleged substantially the same facts and legal claims.
2. Smith Barney denied the allegations in the Complaint and the First Amended Complaint, including alleged liability under Title VII of the Civil Rights Act of 1964 or any other federal, state or local laws, and specifically denied that it unlawfully discriminated against the Smith Barney Named Plaintiffs or Class Members on the basis of sex, or that the Smith Barney Named Plaintiffs of Class Members were otherwise entitled to the relief requested.
3. The parties conducted broad, extensive, and thorough discovery related to class certification throughout 2006 and 2007. Altogether, the written class
2 The named plaintiffs at that time were Renee Fassbender Amocbaev, Deborah Orlando, Kathryn Varner, and Judy Weil. Pursuant to Stipulation, Judy Wei! voluntarily withdrew as a representative plaintiff on September 15, 2006. Subsequently, Ivy So was added as a named plaintiff on November 29,2006.
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certification discovery conducted in the case included six sets of document requests and three sets of interrogatories propounded by the Smith Barney Named Plaintiffs, and two sets of document requests and interrogatories propounded by Smith Barney. Smith Barney produced, and Smith Barney Class Counsel reviewed, over 160,000 pages of documents. Smith Barney Class Counsel also reviewed, and, with expert assistance, analyzed vast amounts of computerized data, including Smith Barney's client account data as well as personnel, compensation and payroll data for Financial Advisors. The discovery process was thorough, and it required the parties to engage in numerous and extensive meetings and conferences concerning the scope of discovery and the analysis regarding the various electronic data, policy documents, and complaint files produced.
4. Deposition discovery was also extensive. Smith Barney Class Counsel deposed 10 individuals, including 30(b)(6) deponents who testified on a variety of topics, including Smith Barney's compensation, account distribution, and partnership policies; organizational structure; EEO compliance; human resources functions; training; electronic data storage; retention of documents; and internal complaint and investigation procedures. Smith Barney took the depositions of Ms. Amochaev, Ms. Orlando, Ms. Varner and Ms. So.
5. Smith Barney Class Counsel and counsel for Smith Barney recognized the costs and risks of prosecuting the Smith Barney action through class certification, summary judgment, trial, and appeal. Smith Barney Class Counsel believed that it was in the interest of all members of the Smith Barney Settlement Class to resolve fmally and completely the potential claims of the Class Members against Smith Barney. Smith Barney Class Counsel believed that the terms of the Settlement Agreement (the
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"Smith Barney Settlement Agreement") were in the best interests of the Class and were fair, reasonable, and adequate. Smith Barney wished to bring the litigation to a conclusion on the terms set forth in the Smith Barney Settlement Agreement.
6. The Smith Barney Settlement Agreement was reached under the supervision of experienced mediator Hunter Hughes, Esq. Counsel for the parties were experienced class action lawyers who retained Mr. Hughes for his expertise in mediating many complex class actions, including those involving gender discrimination in employment. Mr. Hughes conducted multiple mediation sessions between the parties in San Francisco and New York. At least one of the Smith Barney Named Plaintiffs attended each of the mediation sessions, and all were actively involved in shaping the monetary and injunctive relief set forth in the Smith Barney Settlement Agreement. At all times during the process, counsel bargained vigorously and at arm's length on behalf of their clients.
7. Without any admission or concession by Smith Barney of any liability of wrongdoing with respect to the allegations in the Complaint or the First Amended Complaint, all released claims were finally and fully compromised, settled, and released subject to the terms and conditions of the Smith Barney Settlement Agreement, which were the subject of extensive negotiation and ultimate agreement by the parties.
8. On May 1, 2008, the United States District Court for the Northern District of California granted preliminary approval to the Smith Barney Settlement Agreement.
9. On August 13, 2008, the United States District Court for the Northern District of California granted final approval of the Smith Barney Settlement Agreement.
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10. Smith Barney has satisfied all obligations relating to the monetary relief provisions set forth in the Smith Barney Settlement Agreement.
C. Morgan Stanley Smith Barney Joint Venture 1. On January 13,2009, Morgan Stanley and Citigroup announced that
they had reached an agreement to combine Morgan Stanley's Global Wealth Management Group and Citigroup's Smith Barney into a new joint venture to be called Morgan Stanley Smith Barney ("MSSB"). Under the terms of the agreement Citigroup exchanged 100 percent of its Smith Barney, Smith Barney Australia and Quilter units for a 49 percent stake in the joint venture, while Morgan Stanley exchanged 100 percent of its Global Wealth Management business for a 51 percent stake in the joint venture. All of the employees covered by the Morgan Stanley and Smith Barney Settlement Agreement are now employed by MSSB.
2. The contribution of employees to MSSB from Morgan Stanley and from Smith Barney necessitates a number of changes to the Morgan Stanley Agreement and Smith Barney Agreement to the extent they would be applicable to MSSB.
3. Most of the provisions in the Morgan Stanley and Smith Barney Settlement Agreements are substantially identical. However, there are a number which are different and, in some cases, inconsistent with each other.
4. MSSB recognized the importance of the programmatic relief set forth in both the Morgan Stanley and Smith Barney Settlement Agreements. Therefore, in an effort to consolidate the Morgan Stanley and Smith Barney Settlement Agreements, Morgan Stanley Class Counsel, Smith Barney Class Counsel, and counsel for MSSB, who all are experienced class action attorneys, participated in detailed and exhaustive
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discussions and negotiations over the course of over twenty months. The parties engaged

the services of Hunter Hughes, Esq., a highly experienced professional mediator, skilled in

mediation of complex class actions, including employment discrimination litigation. Mr.

Hughes was familiar with both the Morgan Stanley and Smith Barney Settlement

Agreements and having served as the mediator for both settlements. Through these efforts

the parties concluded the execution of this Consolidated Settlement Agreement. During the

negotiations, counsel bargained vigorously on behalf oftheir clients. All negotiations were

conducted at arms' length and in good faith, with the participation ofNarned Plaintiffs.

5. Morgan Stanley Class Counsel believes that the terms of this

Consolidated Settlement Agreement are in the best interests of the Morgan Stanley Class,

are consistent with the Morgan Stanley Settlement Agreement, and are fair, reasonable,

and adequate.

6. Smith Barney Class Counsel believes that the terms of this

Consolidated Settlement Agreement are in the best interests of the Smith Barney Class, are

consistent with the Smith Barney Settlement Agreement, and are fair, reasonable, and

adequate.

m. GENERAL TERMS OF THE SETTLEMENT AGREEMENT
A. Definitions. In addition to terms identified and defmed elsewhere in this

Consolidated Settlement Agreement, and as used in this Consolidated Settlement

Agreement, the terms below shall have the following meanings:

1.

"Class Member" means any person who meets the criteria set forth

in the defmition of"Settlement Class" below.

2. "Consolidated Settlement Agreement", "Settlement," and

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"Agreement" each mean the settlement as reflected m this Consolidated Settlement Agreement.
3. "Court" means the United States District Court for the District of Columbia.
4. "Diversity Monitor" means the individuals appointed to carry out the duties specified in Section V.F.1. of this Agreement.
5. "Effective Date" is October 1, 2010. 6. "Final Approval" means the date on which the United States District Court grants fmal approval of the Consolidated Settlement Agreement. 7. "Financial Advisor" or "FA" means a person employed by MSSB as a financial advisor. 8. "Lead Class Counsel" means Kelly Dermody of Lieff, Cabraser, Heimann & Bernstein, LLP, Adam Klein of Outten & Golden, LLP, Cyrus Mehri of Mehri & Skalet, PLLC, and Steven M. Sprenger of Sprenger & Lang, PLLC. 9. "Morgan Stanley Class Counsel" means the law firms of Mehri & Skalet, PLLC, Sprenger & Lang, PLLC, and Moody & Warner, PC. 10. "MS-GWMG" refers to what was the Global Wealth Management Group of Morgan Stanley & Co. Incorporated and its predecessor, Morgan Stanley DW Inc. 11. "Financial Advisor Associate (FAA)" means a person employed by MSSB as a registered fmancial advisor associate who has not yet become a Financial Advisor. This position was previously referred to as "Registered Financial Advisor Trainee."
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12. "Settlement Class" or "Class" means the class covered by this Consolidated Settlement Agreement, which is defined as all women employed as Financial Advisors or Registered Financial Advisor Associates by MSSB at any time during the Duration of the Settlement as defmed below.
13. "Smith Barney Class Counsel" means the law firms of Altshuler Berzon, Lieff, Cabraser, Heimann & Bernstein, LLP, Mehri & Skalet, PLLC, and Outten & Golden, LLP.
B. Duration of the Settlement. The programmatic relief embodied in this Consolidated Settlement Agreement and the agreements incorporated in it shall remain binding on the parties and their agents and successors until October 1, 2015.
C. Cooperation. The parties agree that they will cooperate to effectuate and implement all terms and conditions of this Consolidated Settlement Agreement, and exercise good faith efforts to accomplish the terms and conditions of this Consolidated Settlement Agreement. The parties agree to accept non-material and procedural changes to this Consolidated Settlement Agreement if so required by the Court in connection with Final Approval of the Settlement, but are not obligated to accept any changes in the substantive programmatic relief provided for herein, or any other substantive change.
D. Jurisdiction and Venue. The parties agree that the Court has jurisdiction over the parties and the subject matter of this Consolidated Settlement Agreement and that venue is proper. The Court shall retain jurisdiction of this Consolidated Settlement Agreement until October 1, 2015 solely for the purpose of entering all orders and judgments authorized hereunder that may be necessary to implement and enforce the relief provided herein.
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E. Effect on Morgan Stanley and Smith Barney Settlement Agreements. As of the Effective Date of this Consolidated Settlement Agreement, the Morgan Stanley and Smith Barney Settlement Agreements will be superseded by this Agreement except as to the following provisions:
1. Smith Barney Settlement Agreement provisions not superseded: IV. Court Approval/Notice and Fairness Hearing V. Release/Bar of Claims IX. Monetary Relief X. Attorneys' Fees, Expenses of Class Counsel and Administrative Expenses XL Termination of the Settlement Agreement
2. Morgan Stanley Settlement Agreement provisions not superseded: IV. Court Approval/Notice and Fairness Hearing V. Release/Bar of Claims Vll. Monetary Relief Xll. Attorneys' Fees and Expenses of Class Counsel
IV. NO ADMISSION, NO DETERMINATION A. This Consolidated Settlement Agreement does not, and is not intended to
constitute, nor shall it be deemed to constitute, an admission by any party as to the merits, validity or accuracy of any of the allegations, claims or defenses of any party in the Morgan Stanley or Smith Barney cases. By entering into this Agreement, MSSB does not admit or concede, expressly or impliedly, but denies that it has in any way violated Title Vll, parallel state and local laws prohibiting sex discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Neither the Court nor any other court has made any findings or expressed any opinion concerning the merits, validity
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or accuracy of any of the allegations, claims or defenses in this case. B. Nothing in this Consolidated Settlement Agreement, nor any action taken in
implementation thereof, nor any statements, discussions or communications, nor any materials prepared, exchanged, issued or used during the course of the mediation or negotiations leading to this Consolidated Settlement Agreement, is intended by the parties to, nor shall any of the foregoing constitute, be introduced, be used or be admissible in any way in this case or any other judicial, arbitral, administrative, investigative or other proceeding of whatsoever kind or nature (including, without limitation, the results of the Claims Process established under this Consolidated Settlement Agreement) as evidence of discrimination, retaliation or sexual harassment or as evidence of any violation of Title VII, parallel state and local laws prohibiting sex discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Notwithstanding the foregoing, this Consolidated Settlement Agreement may be used in any proceeding in the Court or in mediation or arbitration to enforce or implement any provision of this Consolidated Settlement Agreement or implement any orders or judgments of the Court entered into in connection herewith. V. PROGRAMMATIC RELIEF
A. Communications. Morgan Stanley Smith Barney LLC ("MSSB") shall distribute its Non-Discrimination and Anti-Harassment Policy, including its prohibition against retaliation, to all employees upon hire (in hard copy or by electronic mail) and then on an annual basis via email from the CEO of Morgan Stanley. Employees shall be required to submit an acknowledgment of receipt.
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In addition, the President ofMSSB shall issue a separate statement in support of the Policy and its underlying tenets. The Policy will be available on the Firm's intranet site and will be incorporated into various other Firm policies including its Code of Conduct and its Internet and Electronic Co=unications Usage Policy.
The Non-Discrimination and Anti-Harassment Policy (including the prohibition against retaliation) and the behaviors it seeks to promote and prevent shall be the subject of a mandatory training that all employees will be required to complete upon hire.
B. Branch Management 1. Mobility. Field sales management positions for which Financial
Advisors may be eligible will be posted on MSSB's Internal Job Bank. These positions currently are titled: Producing Branch Manager; Resident Manager; and Business Development Officer. Minimum requirements for qualification for a management position are available on MSSB's internal job bank. All positions will be posted for a minimum of five (5) business days. Either the hiring manager or Human Resources will follow up with each applicant/candidate in a timely manner. In addition, MSSB shall develop and implement a computerized system to generate an electronic mail notification to Financial Advisors who request to be informed of new entry level field sales management job postings.
MSSB shall develop and implement a comprehensive management assessment and development program which it will implement to the extent there are management openings and there is a need for management candidates. The program will provide candidates with a formal and transparent path to assessment and selection as Branch Managers, and provide field management with an established and tested protocol for
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selection of high-potential candidates by trained assessors. MSSB shall post a written description of the management assessment and development program and the criteria for admission on the Firm's intranet site.
The Industrial Psychologists shall review MSSB's branch management assessment program prior to its implementation, and, if appropriate, make recommendations for increasing the participation of females in the branch manager assessment program (including review of the criteria for admission) and also make recommendations for programs to increase the participation of women in branch management. These recommendations shall be made in accordance with Section V.F.2. below.
MSSB shall provide all management-level field sales personnel with diversity training no less than every other year. The format of such training may vary from jurisdiction to jurisdiction depending on the relevant legal requirements. However, all managers shall, at a minimum, be required to complete an interactive, customized, elearning training program. MSSB will provide training to the following management-level field positions, or their equivalents: Division Directors, Regional Managers, Complex and other Non-Producing Managers, Business Development Officers, Producing Branch Managers, Resident Managers, Risk Officers, and Service Managers.
2. Complex and Branch Manager Compensation. Complex and Branch Manager (Non-Producing and Producing) compensation shall have a meaningful diversity component designed to measure and reward efforts at diversifying representation rates in the Financial Advisor position, including recruiting, training, and retaining qualified female Financial Advisors. MSSB agrees that it shall develop and implement a quarterly process whereby field sales management shall be required to report on their best
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efforts and results in the areas of sourcing, recruiting, mentoring, training, and promoting a diverse workforce, including qualified female Financial Advisors and Registered Financial Advisor Associates (including, for example, their efforts to retain qualified female Financial Advisors) and their efforts to assist female Financial Advisors in, among other things, increasing their production, participating in partnerships in the branch, participating in teams, and encouraging and sponsoring women for leadership positions and whereby field sales management will be reviewed and held accountable by senior MSSB management for these efforts. The Diversity Monitor will review the diversity-related quarterly self-assessment process for field sales management and the diversity component of each Complex and Branch Manager's compensation.
C. Account Re-Distribution 1. MSSB will continue to use Morgan Stanley's "Power Ranking"
system to rank Financial Advisors on performance factors to determine the distribution of the accounts of departing Financial Advisors and those who leave production. Under this Settlement, MSSB has made significant changes to the Power Ranking system, including reducing reliance on historical factors and more heavily weighting criteria which reflect recent performance. MSSB also agrees to automate the account re-distribution process based on the revised Power Rankings and to limit the exceptions that can be made to the Power Rankings. The revised Power Ranking factors are set forth in Appendix A filed under seal along with this Consolidated Settlement Agreement.
2. Power Rankings a. All Power Ranking factors that measure performance from
the previous twelve-month period will be adjusted to encompass a 12-month period
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exclusive of absence for parental leave or short-term disability leave. For example, if a Financial Advisor was on a leave of absence for four of the preceding twelve months, the previous 12 months measure will instead count the last twelve months that the employee was active.
b. The methodology for calculating the Power Rankings will be provided to each Financial Advisor, including the name of each factor, an explanation of each factor, and how each factor is weighted. Upon hire, each Financial Advisor will be individually provided with the methodology of the objective measures utilized in the Power Ranking calculation and the manner in which calculations are completed and this will be available to all Financial Advisors electronically. MSSB agrees to provide notice to Financial Advisors regarding any modification to the Power Ranking methodology.
c. MSSB shall inform each Financial Advisor of her or his individual ranking at the time any re-distribution is made. The actual re-distribution of a departing Financial Advisor's book will be made available to a Financial Advisor in the Branch confidentially upon a request to the Complex or Branch Manager, Complex or Branch Service Manager, Human Resources representative, or the Care Administrator, who shall obtain the information from MSSB without revealing the name of any requestor and such information shall include the rankings and (without identification of any particular Financial Advisor by name) the number of accounts and the assets distributed to each ranked Financial Advisor. MSSB shall inform Financial Advisors upon hire of the process by which and people from whom they may confidentially request the actual redistribution information, including that their identity will not be revealed to anyone outside the Care Administrator's office if they make such request to the Care Administrator. This
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information will also be posted on the Firm's intranet site. d. Review of Account Re-distributions. On an annual basis, the
Industrial Psychologists to be appointed as set forth in Section V.F.2. below will review how the Account Re-distribution process has been operating, including performing a companywide statistical regression analysis of account distributions by gender and how women rank in each of the Power Ranking factors, as well as all exceptions and complaints and shall report their findings of deviation, if any, to the Diversity Monitor. In addition, the Industrial Psychologists will also review annually the account re-distribution data and related compensation data and the rankings of female Financial Advisors on each of the individual factors and related performance data and use such information in considering recommendations, if any, for changes to the Power Ranking formula. On an annual basis, the Industrial Psychologists shall report their findings of deviations, if any, to the Diversity Monitor. If, as a result of their analysis, the Industrial Psychologists recommend any changes to the Power Ranking factors or weightings, they shall report those recommendations to Lead Class Counsel and MSSB. If necessary, Lead Class Counsel and counsel for MSSB will reconvene to discuss the findings of the Industrial Psychologists and whether further appropriate changes to the Power Ranking criteria or distribution process should be made. The only changes to be made to the Power Ranking criteria are those agreed to by Lead Class Counsel and counsel for MSSB. If the parties are unable to come to agreement on any proposed changes, no changes will be made to the Power Ranking criteria.
3. Account Re-distribution Policies a. MSSB senior management will 1ssue a comprehensive
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account re-distribution policy statement, which shall include policies covering the redistribution of the accounts of departing Financial Advisors, retiring Financial Advisors, departing partners, and leads, call-ins, and walk-ins. The statement shall be issued via email to all field employees and shall be posted on MSSB's intranet site and shall include a prohibition on discrimination. In addition, MSSB will train all current Branch Managers, or other branch personnel responsible for implementing account re-distribution policies, on account re-distribution policies and procedures at the time the settlement becomes effective, and will similarly train all new managers that are subsequently hired.
b. Financial Advisors are not eligible for account redistributions if they are: (1) currently on "heightened supervision" as defined by MSSB policy; (2) subject to any regulatory action reportable as a 'yes' answer on Form U-4 questions 14C-G; (3) subject to discipline reported on Form RE-3 in the last 12 months; or (4) subject to any written performance or workplace conduct warning in the last 90 days. Lateral recruits to MSSB will be ineligible for account re-distributions during their first 12 months of employment with MSSB. MSSB has the discretion to uniformly extend this 12month period. New hire Financial Advisor Associates are ineligible until they have successfully satisfied the preliminary production thresholds established under the Training Program; provided, however, that MSSB has the discretion to modify this policy to allow Financial Advisor Associates to receive account re-distributions, subject to limitations based on their length of experience as a Financial Advisor and size of account, during their first 12 months of employment. Financial Advisors on parental or short-term disability leave will have the option to elect prior to taking leave, or as soon as practicable after commencing such leave, whether they will receive account re-distributions while on leave,
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in which case they will participate as if they were not on leave with the distributed accounts handled in the same manner as their other accounts are handled while on leave, or whether they will receive credit for re-distributions while on leave.
c. Where an exception is made to the Power Ranking process because of, for example, a client relationship or client service needs, each individual exception shall be documented by the Branch Manager or his/her designee in writing, including the legitimate business reasons for the exceptions, and approved by the Regional or Complex Manager, or his or her designee. Customer preference based on bias against women cannot be used as a legitimate business reason for an exception; provided, however, that MSSB shall have no obligation to inquire as to or otherwise attempt to discover the reason for a customer preference for or against a Financial Advisor or Financial Advisor Associate. Records of all such exceptions shall be kept for purposes of monitoring policy compliance for the duration of this Agreement and shall be regularly reviewed by the Regioual Manager, or his or her designee, and shall be included in the quarterly reports provided to the Diversity Monitor. MSSB shall provide the Diversity Monitor quarterly reports on exceptions being made in the branches, including information on the identity of the branches, the branch managers who approved the exceptions, and an explanation ofthe exception.
d. Except for a lateral recruit who receives a re-distribution in his or her first twelve (12) months of employment because of business exigencies, the Financial Advisor receiving a re-distribution through an exception will be disqualified from receiving other re-distributions of approximately equal asset value in the same or subsequent re-distributions ("Debit"). An individual Financial Advisor who does not
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rece1ve a specific re-distribution as a result of an exception shall receive additional accounts in the same or subsequent re-distributions of approximately equal asset value ("Credit"). Provided, however, that MSSB may implement a system pursuant to which an account re-distribution will not result in a Debit or Credit for a subsequent re-distribution if the majority of the assets in the distributed account leave MSSB before the next redistribution.
e. Branch Managers who are determined to have distributed an account pursuant to any improper exception shall receive appropriate discipline, which can include a material reduction in their annual bonus, and which shall be reviewed by the Diversity Monitor in accordance with Section V.F.l.
f. MSSB shall enhance its technology to allow its account redistribution process to be computer automated, subject to Branch Manager review to ensure compliance with regulatory requirements. Account re-distributions will be made through this automated process, subject to exceptions described in Section V.C.3. above. The results of all account re-distributions shall be stored and readily retrievable for monitoring to ensure compliance with account re-distribution policies.
4. Lateral Recruitment Packages a. The Industrial Psychologist shall review MSSB's processes
for determining lateral FA recruitment compensation packages (including loans, bonuses, and other transitional compensation) and, if appropriate, make recommendations for improving these processes. These recommendations shall be designed to promote gender equity in the receipt and amount of transitional compensation packages-after taking into consideration factors such as the lateral recruit's production start date, production, assets

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under management, return on assets, product mix and any non-discriminatory factors-and shall be made in accordance with Section V.F.2. below.
b. MSSB shall provide a summary of data pertaining to lateral FA recruitment to the Diversity Monitor. The summary information will include comparative data on gender, and information on geographic location, amount of transitional compensation by component, methodology used to determine and any other factors taken into consideration in offering the transitional compensation, and any necessary explanatory information. The Diversity Monitor will review and report on this data to the Industrial Psychologists and Lead Class Counsel.
5. Retiring Financial Advisors a. The book of business formerly serviced by a retiring
Financial Advisor will be re-distributed through the Power Ranking system set forth above unless a Joint Production Arrangement/Agreement (JPA) has been in effect for twelve (12) months or longer at the time of retirement.
b. MSSB will consider the efforts made by branch management to increase participation by female Financial Advisors in JPAs with retiring Financial Advisors in determining the diversity component of Branch Manager compensation.
c. The Industrial Psychologists shall make recommendations for substantially increasing the participation of women in the receipt of retiring Financial Advisors' books of business. These recommendations shall be made in accordance with Section V.F.2. below.
d. MSSB will implement a system of documentation for all accounts retained through JPAs in effect between twelve (12) and twenty-four (24)
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months. MSSB will retain data about the assets retained, gender of the person who otherwise would have received re-distribution if Power Ranking had been followed, and any compensation paid to the retiring partner by the non-retiring partner. This data will be provided to the Diversity Monitor on a quarterly basis.
6. Partnerships a. Uuless a Joint Production Arrangement/Agreement ("JPA")
has been in effect for twelve (12) months or longer at the time of departure, the book of business formerly serviced by a departing Financial Advisor will be distributed through the Power Ranking system.
b. MSSB will consider the efforts made and results achieved by branch management to increase participation by female Financial Advisors in partnerships in the branch in determining the diversity component of Branch Manager compensation.
c. The Industrial Psychologists shall review and, if appropriate, make reco=endations for substantially increasing the participation of female Financial Advisors in teams. These reco=endations shall be made in accordance with Section V.F.2. below.
d. For purposes of a Financial Advisor's Power Rankings, MSSB will count partnership assets under management based on the percentage of the commission split specified in the partnership agreement.
e. All Joint Production Agreements will include a plan for the re-distribution of partnership assets in the event of the partnership's or team's dissolution.
f. MSSB management and Human Resources personnel shall complete a "Partnership Dispute Report." A Partnership Dispute Report shall describe the
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date, names/genders of the affected FA's at issue, and the resolution for any time MSSB management and/or Human Resources intervene in, mediate, and/or resolve a dispute that includes at least one female and one male FA regarding partnership formation, dissolution or allocation of assets within a partnership. The Partnership Dispute Reports shall be provided to the Diversity Monitor on a quarterly basis.
g. The Diversity Monitor will review female FA participation in partnerships. The Diversity Monitor will receive copies of any complaints made to MSSB management or its legal counsel by female Financial Advisors regarding any aspect of partnerships. Female Financial Advisors shall be informed that they can report to the CARE program any partnership dissolution in which management was involved and in which they are dissatisfied with management's decision regarding the partnership dissolution, even if the Financial Advisor is not claiming discrimination. Training will be provided to Complex and Branch Managers about how to properly handle partnership formation and dissolution.
h. MSSB will implement a system of documentation for all accounts retained through a JPA in effect between twelve (12) and twenty-four (24) months. MSSB will retain data about the assets retained, gender of the person who otherwise would have received distribution if Power Ranking had been followed, and any compensation paid to the remaining partner by the departing partner. This data will be provided to the Diversity Monitor on a quarterly basis.
7. Leads, Call-ins, and Walk-ins a. Each Branch Office shall implement a "Financial Advisor of
the Day" program. Pursuant to this program, all client prospects who either walk in or
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telephone the branch and who are seeking a Financial Advisor shall be directed to the Financial Advisor serving as the Financial Advisor of the Day. The daily assignments shall be made alphabetically and announced on a monthly basis on or before the last day of the preceding month. The monthly roster shall be openly posted in a conspicuous location within the branch where all other Firm policies are posted. Participation among eligible Financial Advisors shall be voluntary each month.
b. Each Financial Advisor of the Day shall complete a "Financial Advisor of the Day Activity Log" that will detail all telephone calls and walk-in prospects fielded by the Financial Advisor and the disposition of each. The logs shall be maintained in a Branch Financial Advisor of the Day file for the duration of the Agreement.
c. If a prospect insists on speaking to the Branch Manager, the Branch Manager will direct the individual to the Financial Advisor of the Day. If the Financial Advisor of the Day is not qualified to handle the prospect's account based on the nature of the account, experience level of the Financial Advisor, or licensing, the Branch Manager shall refer the prospective client to the next available Financial Advisor of the Day on the monthly roster qualified to handle the account. Such referrals will not disqualify the receiving Financial Advisor from participating as Financial Advisor of the Day on her designated day on the monthly roster.
d. If the Branch Manager determines that the Financial Advisor of the Day is not qualified to handle a prospective client, the Branch Manager shall complete an exception report specifying the legitimate business reason why the Financial Advisor of the Day was not selected. The Diversity Monitor shall receive this exception
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report. Customer preference based on bias against women shall not be a legitimate reason for a prospect to be directed away from the Financial Advisor of the Day, provided, however, that MSSB shall have no obligation to inquire as to or otherwise attempt to discover the reason why a prospective client elects not to work with a particular Financial Advisor. The exception reports shall be maintained in a Branch Financial Advisor of the Day file for the duration of the Agreement.
e. All Financial Advisors and Registered Financial Advisor Associates who have successfully satisfied the preliminary production thresholds established under the Training Program shall be eligible to participate. Producing Branch Managers and Resident Managers may participate in the Financial Advisor of the Day program to the same extent as Financial Advisors and Financial Advisor Associates, except they too must comply with the process described in this Section, including use of exception reports described in paragraph V.C.7.d. above, and may receive call-ins, walk-ins and similar leads only when they are the designated Financial Advisor of the Day.
f. Unauthorized failure to perform Financial Advisor of the Day obligations as designated shall render a Financial Advisor ineligible to participate in the Program for a period of six (6) months. The branch shall maintain a list of those Financial Advisors who elected not to participate or who otherwise were ineligible.
8. Distribution Upon Transfer to Non-Producing Manager a. Where no JPA has been in existence for at least twelve (12)
months at the time of transfer, the book of business serviced by a producing manager who is transferred to a non-producing Branch Manager position or a Financial Advisor who moves to a non-producing Sales Manager position will be distributed through the Power
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 31 of 50
Ranking system as set forth in Sections V.C.2. above. b. MSSB will implement a system of documentation for all
accounts retained through a JPA in effect between twelve (12) and twenty-four (24) months, with reporting to the Diversity Monitor about the assets retained and gender of the person who otherwise would have received distribution if Power Ranking had been followed. This data will be provided to the Diversity Monitor on a quarterly basis.
9. Disputes Concerning Account Re-distributions The parties agree that if at any time during the term of this Consolidated Settlement Agreement a dispute shall arise between MSSB and a Financial Advisor or a Registered Financial Advisor Associate concerning any account re-distribution, such dispute shall initially go through the MSSB's internal complaint process which includes access to mediation under MSSB's alternative dispute resolution mechanism ("CARE"). MSSB agrees to continue the existing tolling provisions under the CARE program guidelines for the duration of this Agreement; provideQ, however, that if a Financial Advisor submits a gender-related complaint through CARE, MSSB agrees that the statutes of limitations on her legal claims will be tolled for the greater of 120 days from the date of her CARE complaint or until the CARE complaint process is resolved. However, nothing herein shall prevent any Class Member or Named Plaintiff from individually pursuing any legal claim not released under this Settlement through any applicable governmental agency or court of law if she is otherwise entitled to do so. D. Development Opportunities. MSSB shall work with the jointly appointed Industrial Psychologists to develop workplace initiatives designed to attract women to MSSB as Financial Advisors, and to retain them and enhance their success, including
28

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 32 of 50
targeted mentoring and training. Training and mentoring may include, but is not limited to, training conference calls, online courses, and in person seminars. The Industrial Psychologists shall make recommendations to promote equitable participation of female Financial Advisors and Registered Financial Advisor Associates in development opportunities. These recommendations will be made in accordance with Section V.F.2. below.
MSSB additionally agrees to provide exit questionnaires to Financial Advisors and Registered Financial Advisor Associates who terminate voluntarily in order to gain a better understanding as to the reason for the departures. MSSB shall provide all of the information from the responses to the questionnaires of female Financial Advisors and Registered Financial Advisor Associates annually to the Industrial Psychologists, the Diversity Monitor and individuals within MSSB responsible for hiring Financial Advisors and Registered Financial Advisor Associates.
MSSB agrees to maintain its commitment to the biannual Women's Business Exchange and the Women's Management Forum preceding the biannual Financial Advisor conference, or equivalent programs.
E. Complaint Process and Training. The complaint process, including MSSB's prohibition against retaliation, as provided in the Non-Discrimination and AntiHarassment Policy, shall be communicated in writing to all Financial Advisors and Financial Advisor Associates upon hire, and annually to all Financial Advisors. New hires shall be required to submit an acknowledgment of receipt of this communication.
MSSB will provide the Human Resources staff for the US Wealth Management Division supporting Financial Advisors and Registered Financial Advisor Associates with
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 33 of 50
appropriate training regarding compliance with state, federal, and local EEO laws; MSSB's anti-discrimination and harassment policies; and this Consolidated Settlement Agreement.
MSSB will provide its US Wealth Management Human Resources staff with appropriate training regarding best practices for complaint investigation and resolution. Any reported allegations of gender discrimination or related retaliation will be investigated promptly. The investigation may include individual interviews with the parties involved and, when necessary, with individuals who may have observed the alleged conduct or may have other knowledge relevant to a determination or resolution of the underlying complaint. The employee making the complaint will be advised that the investigation is to be co=enced. Confidentiality will be maintained throughout the investigation process to the greatest extent possible, and the individual making the complaint will be kept informed regarding the course of the investigation to the extent consistent with adequate investigation and appropriate corrective action. Individuals involved in the investigation will be directed to maintain confidentiality. At the conclusion of the investigation, the Firm will advise any individual who has made a complaint that the investigation has concluded and share other information as may be appropriate under the circumstances.
MSSB will retain documents sufficient to show complaints by female Financial Advisors of sex discrimination, sex bias, and/or retaliation related to such complaints for the term of the Consolidated Settlement Agreement. This includes, but is not limited to, complaints made directly to in-house or outside counsel. MSSB will provide copies of all sex discrimination, sex bias, and retaliation complaints to the Diversity Monitor on a monthly basis.
F. Appointments.
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1. Diversity Monitor. The parties shall jointly appoint Cathy Pepe, Esq. as the diversity monitor ("Diversity Monitor''). The parties will jointly appoint J.H. (Rip) Verkerke, Esq. as a transitional diversity monitor for the purpose of monitoring specific compliance issues which arose under the Smith Barney Settlement Agreement prior to June 1, 2009. Professor Verkerke's role as transitional diversity monitor will continue for six months from the date of this Agreement after which he will meet with Cathy Pepe to provide her with information on any outstanding matters related to his role as transitional diversity monitor. The Diversity Monitor shall be external to and independent of MSSB, but will report directly to the President of MSSB. The Diversity Monitor shall monitor MSSB's efforts to carry out the terms of the Consolidated Settlement Agreement. This shall include the following:
a. The Diversity Monitor will receive monthly reports regarding complaints of women Financial Advisors and Registered Financial Advisor Associates alleging sex discrimination, sex bias or retaliation, and resolution of investigations of such complaints through the CARE program or otherwise.
b. The Diversity Monitor will review reports by the Company on the diversity-related annual assessment process for Complex and Branch Managers (Non-Producing and Producing), including the quarterly self-assessments completed by Complex and Branch Managers, and annual bonus data and information provided by the Company related to the diversity component of each Complex and Branch Manager's compensation.
c. The Diversity Monitor will review account re-distribution data, exception reports and complaints to monitor policy compliance, including
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information on the identity of the branches, the branch managers who approved the exceptions and an explanation of the exceptions.
d. If the Diversity Monitor identifies issues of potential noncompliance, the Diversity Monitor will inform MSSB and Lead Class Counsel. In consultation with Lead Class Counsel, MSSB will take appropriate corrective action to address all instances of non-compliance with the provisions herein unless MSSB can show that corrective action would be inconsistent with legitimate business and client needs and objectives. If Lead Class Counsel disagrees with MSSB's determination on the implementation of corrective action, Lead Class Counsel may initiate a meet and confer session with MSSB's counsel and, if necessary, seek mediation, pursuant to Section VII.B. herein. MSSB shall inform the Diversity Monitor and Lead Class Counsel of any corrective action taken pursuant to this paragraph. Where potential non-compliance has been identified, the Diversity Monitor shall have the right to audit the activities in a branch, by reviewing documents, asking branch management to provide explanations and, if necessary, speaking to Financial Advisors in the branch, and shall have the right to receive relevant information from MSSB headquarters upon reasonable request. Nothing herein shall alter or restrict Lead Class Counsel's right to enforce this Consolidated Settlement Agreement under the Dispute Resolution provisions of this Consolidated Settlement Agreement, set forth in Section VII.B. below.
e. On an annual basis, the Diversity Monitor will review the transitional compensation provided to lateral FA recruits, and will report on these records to the Industrial Psychologists. In addition, the Diversity Monitor will receive a copy of the summaries set forth in Section V.C.4.b. above and may interview personnel about the
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rationale for any particular transitional compensation package.

f. The Diversity Monitor will review the participation of

female FAs in teams within and across branches. The Diversity Monitor will review the

Partnership Dispute Reports and will report on these to the Industrial Psychologists.

g. The Diversity Monitor will monitor bi-annual training of

management on EEO policies, and policies against discrimination and retaliation, and

ensure that the training agreed to was implemented.

h. The Diversity Monitor will review how Human Resources

handles investigations and the resolution process for inquiries and complaints.

i.

The Diversity Monitor will review exception reports

regarding the Financial Advisor of the Day program.

j.

The Diversity Monitor will review the exit questionnaire

responses completed by departing female Financial Advisors, as well as information

regarding the retention of female Financial Advisors annually, and report his/her findings

to Human Resources.

k. The Diversity Monitor will provide reports to Lead Class

Counsel and MSSB at least semi-annually regarding the items monitored, including in this

Section and including the analysis of the account re-distribution system. The Diversity

Monitor may report incidents of potential material non-compliance with this Consolidated

Settlement Agreement to Lead Class Counsel and MSSB on a more frequent basis.

1.

The Diversity Monitor shall monitor on an annual basis the

representation rates of women in the Financial Advisor Associate and Financial Advisor

positions.

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m. The Diversity Monitor shall reVIew the actual
implementation of the programs, policies, and initiatives that MSSB is obligated to
undertake by virtue of this Agreement and shall, on an annual basis, report the results of
this review to Lead Class Counsel.
n. The Diversity Monitor will maintain records for the term of
this Consolidated Settlement Agreement.
2. Industrial Psychologists
a. The parties shall jointly appoint as Industrial Psychologists
Drs. Kathleen Lundquist, Irwin Goldstein, and Harold Goldstein, who shall work with
MSSB and Lead Class Counsel to develop innovative, meaningful, novel, state of the art
programs and to make recommendations:
• Concerning policies and programs designed to recruit female Financial Advisors and Financial Advisor Associates to MSSB;
• For increasing participation of female Financial Advisors in the receipt ofretiring Financial Advisors' books of business;
• For increasing participation of female Financial Advisors in teams and partnerships, including commission splits between male and female partners, and dissolution of partnerships and teams;
• Concerning transitional compensation offered to lateral recruits; • Concerning policies and practices with respect to training, development,
and mentoring, that will enhance opportunities for female Financial Advisors and Financial Advisor Associates. Training and development may include, but is not limited to, training conference calls, online courses, and in-person seminars; • Concerning a mentoring program for all Financial Advisor Associates and Financial Advisors; • For increasing the production and earnings of female Financial Advisors, including policies and practices with respect to training, development, mentoring, and business-related allocations; • For increasing the participation of women in MSSB's management assessment and development program and in branch management; and
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 38 of 50
• Concerning a system of semi-annual internal data collection and a monitoring process. b. The Diversity Monitor and Industrial Psychologists shall
review on an annual basis the retention rates of women in the Financial Advisor position and shall report the results of this review to Lead Class Counsel.
c. The Industrial Psychologists shall report to the Diversity Monitor on the programs that the Industrial Psychologists have been involved in by virtue of this Consolidated Settlement Agreement. The three Industrial Psychologists shall coordinate their work to avoid unnecessary duplication.
d. The Industrial Psychologists shall present such recommendations to a senior executive panel of MSSB consisting of senior representatives from Talent Management, Diversity, Employment Law, Human Resources, and US Wealth Management. A copy of the recommendations will also be provided to Lead Class Counsel. If MSSB does not agree with the recommendations, but Lead Class Counsel still thinks they should be implemented notwithstanding MSSB's objections, the Industrial Psychologists, along with Lead Class Counsel, will have the opportunity to present the recommendations to the President of MSSB or the Head of US Wealth Management. MSSB shall decide in good faith consistent with the purposes of this Consolidated Settlement Agreement whether to implement such recommendations. All recommendations of the Industrial Psychologists will be designed to advance the purposes of this Consolidated Settlement Agreement consistent with MSSB's business needs and objectives.
e. On an annual basis, the Industrial Psychologists shall provide to the parties statistical analyses of the Power Ranking criteria as described in Section
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 39 of 50
V.C.2.d. Lead Class Counsel may use the statistical analysis solely for the purpose of monitoring the Settlement by providing recommendations to the Industrial Psychologists and/or meeting and sharing with the Industrial Psychologists, MSSB, the Mediator or the Diversity Monitor their thoughts on how concerns relative to the data might be addressed. The data shall not be admissible for use in other litigation.
f. The Industrial Psychologists shall evaluate the participation of women FAs in teams/partnerships, including, but not limited to, data regarding the gender composition of teams within and across branches, in order to identify methods or approaches to enhance and increase female participation and financial success in teams.
g. Subject to signing an appropriate confidentiality agreement, and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists described in Sections V.F. above will have reasonable access to relevant documents, data, and MSSB employees. This specifically includes data with respect to female Financial Advisor participation in teams or partnerships, including commission splits between male and female partners and dissolution of partnerships and teams, and transitional compensation offered to lateral recruits.
h. The Diversity Monitor and the Industrial Psychologists will be compensated by MSSB.
1. If it becomes necessary to replace the Diversity Monitor or either Industrial Psychologist, the parties shall jointly select a replacement by mutnal agreement.
G. General Non-Discrimination Provisions. Pursuant to MSSB's NonDiscrimination and Anti-Harassment Policy, women Financial Advisors and Registered
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 40 of 50
Financial Advisor Associates will enjoy terms and conditions of employment comparable to their male counterparts.
a. MSSB shall assert the following general policies using a method agreed to by the parties:
b. Prohibition against discrimination on the basis of sex in compensation and business opportunity allocations.
c. Prohibition against retaliation for reporting sex discrimination, participating in the CARE program, participating in this or any discrimination settlement, filing a lawsuit or complaint with any outside agency or entity alleging sex discrimination, or for refusing to participate in sex discrimination.
d. MSSB will not honor business expenses that are directly or indirectly related to male-only entertainment establishments.
e. The parties agree that it shall be a violation of this Consolidated Settlement Agreement for a MSSB supervisor to retaliate against any Class Member for her participation in the prosecution of the allegations contained in the charges underlying this Settlement or in the Settlement itself. However, nothing in this Settlement will prevent a Class Member from pursuing whatever legal rights or remedies she otherwise may have with respect to any individual claim not covered by the claims released through this Settlement. VI. MONITORING
A. Data Collection. MSSB will collect data which will include, but not be limited to: (1) compensation of Financial Advisors; (2) account re-distributions, defined to include all transfers of accounts from one Financial Advisor to another within MSSB such
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as those of retiring and deceased Financial Advisors, not just the distribution of the accounts of departing Financial Advisor; (3) partnerships involving Financial Advisors; and (4) sourcing, recruitment and hiring of Financial Advisors; (5) sex discrimination complaints made by female Registered Financial Advisor Associates or Financial Advisors; (6) retention of Financial Advisors; and (7) any other areas agreed upon by MSSB and Lead Class Counsel. MSSB will include several variables in its data collection, including but not limited to, gender, production and length of experience.
B. Monitoring System. MSSB, with input from the Industrial Psychologists and consent from Lead Class Counsel, will create and implement a system of monitoring compliance with each policy described herein, including, without limitation, the account re-distribution policy using the Power Ranking methodology.
C. Reports. Lead Class Counsel will receive semi-annual reports from the Diversity Monitor.
D. Meetings. MSSB in-house Counsel and Lead Class Counsel will meet at least once every six (6) months, beginning six months after the Effective Date, regarding compliance, and may confer more frequently at their discretion or as dictated by information either side gathers.
VII. ENFORCEMENT
A. No Third Parties. Enforcement of this Consolidated Settlement Agreement shall be prosecuted by Lead Class Counsel or counsel for MSSB only, not third parties. Lead Class Counsel shall meet and confer with counsel for MSSB prior to commencement of any enforcement proceedings.
B. Dispute Resolution. The parties will work diligently and in good
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 42 of 50
faith to resolve all disputes that may arise during the term of this Consolidated Settlement Agreement concerning the rights, obligations and duties of the parties to this Consolidated Settlement Agreement. In the event the parties cannot agree, the parties will attempt to resolve the dispute with the facilitation of a mutually selected mediator, paid for by MSSB. The Court shall retain jurisdiction to enforce the Settlement if the parties are unable to resolve a dispute through mediation. VIII. CONFIDENTIALITY A. Documents and Information Produced by Morgan Stanley, Smith Barney, MSSB and Class Counsel. All proprietary and confidential documents or information that have previously been provided to either Morgan Stanley, Smith Barney, MSSB or Class Counsel in the Morgan Stanley Action and Smith Barney Action as of the date this Consolidated Settlement Agreement is executed, or which are produced by Morgan Stanley, Smith Barney, MSSB Lead or Class Counsel pursuant to any provision of this Consolidated Settlement Agreement shall, unless otherwise agreed, be treated as, and thereafter remain, confidential. Said documents and information shall not be disclosed to anyone other than the Diversity Monitors, Industrial Psychologists, mediator, or the Court in connection with any proceeding to enforce any provision of this Consolidated Settlement Agreement. If such disclosure is deemed necessary by Lead Class Counsel or MSSB, Lead Class Counsel or MSSB shall identify and disclose to the other party such documents and information deemed necessary to disclose at least ten (1 0) business days prior to filing such documents with the Court, and, if a party so requests, shall seek permission to file said documents with this Court under seal. B. Return or Disposal of Confidential Documents and Information. All
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 43 of 50
proprietary and confidential documents or information that have previously been provided to Class Counsel or to Morgan Stanley, Smith Barney, or MSSB as of the date this Consolidated Settlement Agreement is executed, or which are produced by MSSB or Class Counsel pursuant to any provision of this Consolidated Settlement Agreement, shall be destroyed or returned to counsel as follows:
After the expiration of the Consolidated Settlement Agreement all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley, Smith Barney, and MSSB and designated "Confidential for Settlement Purposes Only" or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Consolidated Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the expiration of this Consolidated Settlement Agreement. Certification of such destruction shall be provided to counsel for the producing party.
The preceding paragraphs of this Section are intended to supersede those provisions of the "Confidentiality Agreement For Settlement Discussions" or similar agreements earlier executed by counsel for the parties that address the timing of the return or destruction of proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley Smith Barney or MSSB. All other provisions of the "Confidentiality Agreement For Settlement Discussions" remain in full effect.
Nothing in the preceding paragraphs shall preclude any party from responding to a lawful discovery request, subpoena or court order; provided, however, that the party against whom such discovery is sought or such subpoena or order is directed agrees to
40

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 44 of 50
provide immediate notice and a copy of same to counsel for the other parties to this Consolidated Settlement Agreement.
In the event that this Consolidated Settlement Agreement is terminated for any reason, all proprietary and confidential documents or information provided to Class Counsel or Morgan Stanley or Smith Barney and designated "Confidential for Settlement Purposes Only" or similar designation pursuant to the Confidentiality Agreement, or that have been produced in confidence pursuant to any provision of this Consolidated Settlement Agreement, and all copies of such documents or information, shall, upon request, be returned to counsel for the producing party or be destroyed within thirty (30) days of the date on which this Consolidated Settlement Agreement is terminated. Certification of such destruction shall be provided to counsel for the producing party. IX. GOVERNING LAW
The parties agree that federal law shall govern the validity, construction and enforcement ofthis Consolidated Settlement Agreement. To the extent that it is determined that the validity, construction or enforcement of this Consolidated Settlement Agreement is governed by state law, the law of the District of Columbia shall apply.
This Consolidated Settlement Agreement contains the entire agreement and understanding of the parties with respect to the Settlement and supersedes the Morgan Stanley and Smith Barney Settlement Agreements. This Consolidated Settlement Agreement does not impose any obligations on the parties beyond the terms and conditions stated herein. Accordingly, this Consolidated Settlement Agreement shall not prevent or preclude MSSB from revising its employment practices and policies or taking other personnel actions during the term of this Consolidated Settlement Agreement so long as
41

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they are consistent with this Consolidated Settlement Agreement. Except as specifically provided for herein, this Consolidated Settlement Agreement
may not be amended or modified except with the express written consent of the parties.

X. OTHER CONDITIONS OF SETTLEMENT

A. Notices to CounseL All notices to counsel required or desired to be given

under this Consolidated Settlement Agreement shall be in writing and by overnight mail

and e-mail to counsel for the respective parties (specifically, to Kelly Dermody of Lieff,

Cabraser, Heimann & Bernstein, LLP, Adam Klein of Outten & Golden, LLP, Cyrus

Mehri of Mehri & Skalet, PLLC, Steven M. Sprenger of Sprenger & Lang, PLLC, Mark

Greenfield of Morgan Stanley, and Mark S. Dichter of Morgan, Lewis & Bockius LLP) at

their respective addresses set forth below (or to such other address as any such party or

counsel may designate in a notice). Notices sent to Mark Greenfield under this paragraph

shall be addressed to Mr. Greenfield at the following address: 2000 Westchester Avenue,

Purchase, New York, 10577-2530.

B. Failure to Insist on Strict Compliance. The failure of any party to insist

in any one or more instances on strict compliance with the terms and conditions hereof

shall not be construed to be a waiver of remedies available with respect to any prior or

subsequent breach.
c. Consolidated Settlement Agreement Binding.

This Consolidated

Settlement Agreement shall inure to the benefit of, and be binding upon, the parties hereto

and their respective heirs, dependents, executors, administrators, trustees, legal

representatives, personal representatives, agents, successors and assigns; provided,

however, that this Consolidated Settlement Agreements shall not inure to the benefit of any

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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 46 of 50
third party. D. No Drafting Presumption. All parties hereto have participated, through
their respective counsel, in the drafting of this Consolidated Settlement Agreement and, therefore, this Consolidated Settlement Agreement shall not be construed more strictly against one party than another.
E. Dispute As To Meaning of Agreement Terms. In the event of any dispute or disagreement with respect to the meaning, effect or interpretation of this Consolidated Settlement Agreement hereto, or in the event of a claimed breach of the Consolidated Settlement Agreement, the parties agree that such dispute will be resolved and adjudicated only in accordance with the dispute resolution provisions of Section VII of this Consolidated Settlement Agreement.
F. Interpretation of Terms. Whenever possible, each provision and term of this Consolidated Settlement Agreement shall be interpreted in such a manner as to be valid and enforceable.
G. Paragraph and Section Headings. Paragraph and section headings are for convenience of reference only and are not intended to create substantive rights or obligations.
H. Counterparts. This Consolidated Settlement Agreement may be executed in counterparts. Each signed counterpart together with the others shall constitute the full Consolidated Settlement Agreement.
I. Agreement Binding. As of the date on which counsel for the parties execute this Consolidated Settlement Agreement, this Consolidated Settlement Agreement will be binding in all respects, unless the Court fails to approve this Consolidated
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 47 of 50 Settlement Agreement and the Consolidated Settlement Agreement is thus vacated.
[Remainder ofthis page intentionally left blank.]
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Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 48 of 50

M ~!url'l's·
Email: ehri(a).fi d'u tice.com Steven . Skalet, Esq. MEHRI & SKALET, PLLC 1250 Connecticut Avenue, N.W. Suite 300 Washington, DC 20036 Telephone: (202) 822-5100 Facsimile: (202) 822A997

DATED: May_, 2011
s~
Email: ssprenger@sprengerlang.com
SPRENGER & LANG, PLLC 1400 Eye Street, N.W. Suite 500
Washington, DC 20005
Telephone: (202) 265-8010
Facsimile: (202) 332-6652

DATED: MayZq 20 1

Kelly M. De ody Email: kdermody@lchb.com LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
DATED: May _, 2011

Adam Klein Email: atk@outtengolden.com OUTTEN & GOLDEN, LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005

Anorneysfor the Class

45

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 49 of 50

DATED: May___, 2011

---'"'-<•s M hri, Email: ehri(a).fmd"u tice.com Steven . Skalet, Esq. MEHRI & SKALET, PLLC 1250 Connecticut Avenue, N.W. Suite 300 Washington, DC 20036 Telephone: (202) 822-5100 Facsimile: (202) 822-4997

Steven M. Sprenger, Esq. Email: ssprenger@sprengerlang.com SPRENGER & LANG, PLLC 1400 Eye Street, N.W. Suite 500 Washington, DC 20005 Telephone: (202) 265-8010 Facsimile: (202) 332-6652

Kelly M. De ody Email: kdermody@lchb.com LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000
DA:&:I Facsimile: (415) 956-1008 "'J7.;fJe ;)1 ~/I
Adam Klein Email: atk@outtengolden.com OUITEN & GOLDEN, LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005
Attorneysfor the Class

45

Case 1:06-cv-01142-CKK Document 71-1 Filed 06/22/12 Page 50 of 50
DATED: May2'f, 2011
~sq.~ Email: mdichter@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP I 70 I Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5299 Attorneysfor Morgan Stanley Smith Barney, LLC
46

 
 Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Joanne Augst-Johnson, Nancy Reeves, Debra Shaw, Jan Tyler, Cheryl Giustiniano, Laurie Blackburn, Ema Tarantino, and Elizabeth Reinke, on behalf ofthemselves and all others similarly situated,

Plaintiffs,

Case No. 1:06-cv-01142 (RWR)

v.

CLASS ACTION

Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc.,

Defendant.

Renee Fassbender Amochaev, Deborah Orlando, Kathryn N. Varner and Ivy So, on behalf of themselves and all others similarly situated,

Plaintiffs,

Case No. C-05-1298 PJH (N.D. Cal.)

v.

CLASS ACTION

Citigroup Global Markets, Inc., d/b/a/ Smith Barney,

Defendant.

STIPULATION TO EXTEND CONSOLIDATED SETTLEMENT AGREEMENT

Counsel for the parties hereby stipulate, subject to the approval of the Court to the following terms:
1. The Consolidated Settlement Agreement shall be extended for two additional years, subject to the terms below.
2. Effective October 1, 2015 through September 30, 2017, the parties shall jointly appoint Fred Alvarez, Esq. as the diversity monitor ("Diversity Monitor" or "DM''). The
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Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 2 of 7
Diversity Monitor shall be external to and independent ofMSSB, but will report directly to the Head of the Field for Wealth Management. The Diversity Monitor shall monitor MSSB's efforts to carry out the terms of this Extension of the Consolidated Settlement Agreement. The role of the Diversity Monitor during the Extension will be limited to the tasks set forth below:
a. review annual bonus data and information provided by the Company related to the diversity component of each Complex and Branch Manager's compensation to monitor compliance with the 2015 Managerial Diversity Compliance Program, as it exists or may be modified based on input from the Industrial Psychologists "IPs."
b. review account re-distribution data and exception reports.
c. review the participation and splits of female, African American and Latino FAs in teams within and across branches.
d. review the Partnership Dispute Reports on female FAs and will report on these to the Industrial Psychologists.
e. monitor bi-annual training of management on EEO policies, and policies against discrimination and retaliation, and ensure that the training agreed to was implemented.
f. review exception reports regarding the Financial Advisor of the Day program.
g. review the exit questionnaire responses completed by departing female, African American and Latino Financial Advisors, as well as information regarding the retention of female, Latino and African American Financial Advisors annually, and report findings of this review to Human Resources and report as part of the Diversity Monitor's Report to the Parties.
h. monitor on an annual basis the representation rates of women, Latinos and African Americans in the Financial Advisor Associate and Financial Advisor positions.
1. review the FAA selection process and the conversion rates from FAA to FA.
3. The Diversity Monitor will provide reports to Lead Class Counsel and MSSB at least semi-annually regarding the items monitored, including in this Section and including the analysis of the account re-distribution system. The Diversity Monitor may report incidents ofpotential material non-compliance with this Consolidated Settlement Agreement to Lead Class Counsel and MSSB on a more frequent basis. It is understood that the role of the Diversity Monitor shall be to evaluate and report on MSSB's progress under and compliance with its specific obligations during this extended term. While the parties share an objective of increasing diversity and enhancing the success of diverse individuals through, among other things, the continuation of the initiatives set forth herein, this extension does not require that any statistical outcome be achieved and MSSB's compliance shall not be measured by any statistical outcome.
2

Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 3 of 7
4. Paragraph V.F.l.d. of the Consolidated Settlement Agreement shall remain in effect during the extended term.
5. The complaint reporting process and the Diversity Monitor's role in the review of individual complaints will expire on September 30, 2015.
6. The Diversity Monitor will maintain records for the term of this Consolidated Settlement Agreement and the Extension. By December 31, 2015 Cathy Pepe will transfer her records to Fred Alvarez.
7.
a. During the period October 1, 2015 to September 30, 2017, except as specified below), the role of the IPs will be extended, limited to the tasks set forth below, although MS may engage the IPs on additional matters, outside the scope of the Agreements, at any time.
(i) FAA Selection Process
(1) Continue to work with MS management in evaluating the SRT test which has been implemented as a replacement for the SIFMA Test and provide recommendations, if any, with respect to modifications of that test.
(2) Continue to develop three additional FAA selection products: the entrepreneurial assessment, a structured interview and a role playing tool.
(3) Evaluate the effectiveness of those new selection tools and make recommendations for modification and/or continued use of the tools.
(ii) Managerial Diversity Compensation- The 2015 program will be continued through 2017 subject to further minor refmements to, for example, better capture results on teaming and partnering, with results reported to the Diversity Monitor, the IPs, and the Class Counsel. The Industrial Psychologists will be available for consultation at the request of MS.
(iii) Teaming/Partnerships
Continue to provide recommendations for increasing participation of female, African American and Latino Financial Advisors in teams and partnerships, including splits between male and female partners and between white and Latino and African American partners, and dissolution of partnerships and teams.
3

Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 4 of 7
(iv) The IPs shall report on the management leadership assessment program, to the extent continued by MSSB, to MSSB, the Diversity Monitor and Class Counsel.
(v) The IPs shall report on skills training to diverse FAAS and FAS, to the extent offered, to MSSB, the Diversity Monitor and Class Counsel.
(vi) The IPs shall report on their work to the Diversity Monitor and Class Counsel. Consistent with existing procedure under the Consolidated Settlement Agreement, the IPs shall meet with the Diversity Monitor and Class Counsel at least semi-annually. In advance of those meetings the IPs will provide MSSB with the agenda and a copy of their presentation and data to be presented. The two IPs shall coordinate their work to avoid unnecessary duplication.
b. Subject to signing an appropriate confidentiality agreement, and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists will have reasonable access to relevant documents, data, and MSSB employees. This specifically includes data with respect to female, African American, and/or Latino Financial Advisor participation in teams or partnerships, including splits between male and female partners and white and Latino and African American partners and dissolution of partnerships and teams.
c. The Diversity Monitor will be compensated by MSSB for his remaining work on a fixed fee basis acceptable to the DM and MSSB. The Industrial Psychologists will be compensated by MSSB for their remaining work on a fixed fee basis acceptable to the IPs and MSSB.
d. If it becomes necessary to replace the Diversity Monitor or either Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement.
8. Additional matters not involving the Industrial Psychologists.
a. Account Redistribution Issues
(i) Pre-Existing Client Relationships
(1) MS will initiate a pilot process which includes a prescribed dialogue between branch management and a client where an FA leaves the Firm and the branch learns that another FA has a preexisting relationship with the household but that FA did not originate the relationship and the household has not been part of a JPN for 12+ months. The outline for such dialogue shall be openended and not suggest that a client select a particular FA.
(2) MS will report to class counsel no later than January 31,2016 on the effectiveness of this process and whether it can be implemented more broadly or whether refinements should be made. Iffurther
4

Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 5 of 7
refinements are needed, class counsel and MS will negotiate them in good faith in to achieve a constructive solution that is reasonably crafted to maximize client retention while minimizing any risk of abuse ofthe pre-existing client relationship exception. '
(ii) Debit-Credit Resolution
MS agrees to further modifY the debit/credit resolution process to continue to enhance the pace of resolutions, including (a) implementation of revised system logic that will provide an additional round of credit/debit resolutions per cycle, and (b) modifYing the system so that a round of debit/credit resolutions precede each power ranking cycle, making the largest number ofhouseholds available for the resolution process. The Diversity Monitor will continue to work with MS in evaluating additional modifications to the Account Redistribution program to reduce the existing debit and credit balances. With respect to the credits created pursuant to paragraph V.C.3.d. ofthe Consolidated Settlement Agreement, FAs who have, at the expiration ofthe extended agreement, credits which have been outstanding for two or more years, will have the option of converting those credits into supplemental contributions, in addition to such contributions as the FAs may otherwise qualifY for, into their Business Development Account at the rate of $1 for each $1,000 in outstanding credits resulting from prior exceptions involving households ofless than $10 million and $1 for each $2,000 in outstanding credits resulting from prior exceptions involving households of $10 million or more. To the extent the credit based Business Development funds resulting from such conversion exceed $10,000, the excess will be contributed in subsequent years, subject to a maximum of $10,000 per year. Such supplemental BDA contributions may be used towards coaching and other business development expenses, consistent with MSSB's policies and procedures.
9. Role of Management
Kara Underwood or her successor shall have primary responsibility ensuring the day to day compliance with this agreement and with respect to compliance with this agreement shall report to Shelley 0'Connor or her successor who shall have ultimate responsibility ensuring that MSSB fulfills its duties in this agreement and the underlying settlement agreements.
10. Monitoring Fees
Class Counsel collectively shall be reimbursed at the rate of $150,000 per year for work completed in the extended decree monitoring.
11. Teaming/Partnerships
5

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For one year following the expiration ofthe extended agreements, MSSB will continue programs implemented during the extension ofthe agreements related to increasing participation of female, African American and Latino Financial Advisors in teams and partnerships, including splits between male and female partners and between white and Latino and African American partners. Prior to the expiration ofthe agreements, the IPs will provide any recommendations they have for refinements to the program(s) and MSSB will report to Class Counsel within a reasonable period which of those refmements, if any, they intend to implement.

DATED: September 29, 2015

DATED: September 29,2015

Is/ Cyrus Mehri
Cyrus Mehri E-mail: cmehri@findiustice.com MEHRI & SKALET, PLLC 1250 Connecticut Ave., N.W., Suite 300 Washington, DC 20036 Telephone: (202) 822-5100 Facsimile: (202) 822-4997

lsi James M. Finberg James M. Finberg E-mail: jfinberg@altshukerberzon.com ALTSHULER BERZON LLP 177 Post Street, Suite 300 San Francisco, CA 94108 Telephone: (415) 421-7151 Facsimile: (415) 362-8064

DATED: September 29, 2015
Is/ Kelly M. Dermody
Kelly M. Dermody E-mail: kdermody@lchb.com LIEFF, CABRASER, HEIMANN &
BERNSTEIN, LLP 275 Battery Street San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008
Attorneysfor the Class

DATED: September 29,2015
Is/ Adam Klein
Adam Klein E-mail: atk@outtengolden.com OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Facsimile: (212) 977-4005

6

Case 1:06-cv-01142-CKK Document 77-2 Filed 09/29/15 Page 7 of 7 DATED: September 29, 2015 /s/ Mark S. Dichter Mark S. Dichter E-mail: mdichter@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 170 1 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5291 Facsimile: (215) 963-5001 Attorneysfor Morgan Stanley Smith Barney, LLC
7

 
 Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 1 of 16
CLOSED,JURY,TYPE−H
U.S. District Court District of Columbia (Washington, DC) CIVIL DOCKET FOR CASE #: 1:06−cv−01142−CKK

AUGST−JOHNSON et al v. MORGAN STANLEY DW, INC. Assigned to: Judge Colleen Kollar−Kotelly Case: 1:11−cv−01785−RWR Cause: 28:1331 Fed. Question: Employment Discrimination
Plaintiff

Date Filed: 06/22/2006 Date Terminated: 10/26/2007 Jury Demand: Plaintiff Nature of Suit: 442 Civil Rights: Jobs Jurisdiction: Federal Question

JOANNE AUGST−JOHNSON

represented by Steven M. Sprenger SPRENGER & LANG, PLLC 5501 Park Street Chevy Chase, MD 20815 (202) 772−1150 Email: ssprenger@sprengerlang.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher M. Moody MOODY & WARNER, P.C. 4169 Montgomery Boulevard, NE Albuquerque, NM 87109 (505) 944−0033 Fax: (505) 944−0034 Email: moody@nmlaborlaw.com ATTORNEY TO BE NOTICED

Cyrus Mehri MEHRI & SKALET, PLLC 1250 Connecticut Avenue, NW Suite 300 Washington, DC 20036 (202) 822−5100 Fax: (202) 822−4997 Email: cmehri@findjustice.com ATTORNEY TO BE NOTICED

Ellen L. Eardley MEHRI & SKALET, PLLC 1250 Connecticut Avenue, NW Suite 300 Washington, DC 20036 (202) 446−1910 Fax: (202) 822−4997 Email: eeardley@findjustice.com TERMINATED: 04/02/2015

Kelly M. Dermody LEIFF, CABRASER, HEIMANN & BERNSTEIN, LLP Embarcadero Center West 275 Battery Street 29th Floor San Francisco, CA 94111−3339 415−956−1000 Fax: 415−956−1008 Email: kdermody@lchb.com PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 2 of 16

Mara R. Thompson SPRENGER & LANG, PLLC 310 Fourth Avenue South Suite 600 Minneapolis, MN 55415 (612) 871−8910 Fax: (612) 871−9270 Email: thompson.mara@comcast.net ATTORNEY TO BE NOTICED

Whitney Warner MOODY & WARNER, P.C. 4169 Montgomery Boulevard, NE Albuquerque, NM 87109 (505) 944−0033 Fax: (505) 944−0034 Email: warner@nmlaborlaw.com ATTORNEY TO BE NOTICED

Plaintiff NANCY REEVES

represented by Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher M. Moody (See above for address) ATTORNEY TO BE NOTICED

Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED

Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015

Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Mara R. Thompson (See above for address) ATTORNEY TO BE NOTICED

Whitney Warner (See above for address) ATTORNEY TO BE NOTICED

Plaintiff DEBRA SHAW

represented by Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher M. Moody (See above for address) ATTORNEY TO BE NOTICED

Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 3 of 16

Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015

Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Mara R. Thompson 4585 Weston Lane North Plymouth, MN 55446 (763) 577−0679 Email: thompson.mara@comcast.net ATTORNEY TO BE NOTICED

Whitney Warner (See above for address) ATTORNEY TO BE NOTICED

Plaintiff CHERYL GUISTINIANO

represented by Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher M. Moody (See above for address) ATTORNEY TO BE NOTICED

Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED

Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015

Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Mara R. Thompson (See above for address) ATTORNEY TO BE NOTICED

Whitney Warner (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
LAURIE BLACKBURN On behalf of themselves and all others similarly situated

represented by Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Christopher M. Moody (See above for address) ATTORNEY TO BE NOTICED

Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 4 of 16

Plaintiff JAN TYLER
Plaintiff ERMA TARANTINO
Plaintiff ELIZABETH REINKE

Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Mara R. Thompson (See above for address) ATTORNEY TO BE NOTICED
Whitney Warner (See above for address) ATTORNEY TO BE NOTICED
represented by Cyrus Mehri (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Cyrus Mehri (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Cyrus Mehri (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 5 of 16

Plaintiff RENEE FASSBENDER AMOCHAEV 11ca1785
Plaintiff DEBORAH ORLANDO 11ca1785
Plaintiff KATHRYN N. VARNER 11ca1785

Steven M. Sprenger (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Adam T. Klein Outten & Golden LLP 3 Park Avenue 29th Floor New York, NY 10016 212−245−1000 Fax: 212−977−4005 PRO HAC VICE ATTORNEY TO BE NOTICED
Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Adam T. Klein (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Adam T. Klein (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 6 of 16

Plaintiff JUDY WEIL 11ca1785
Plaintiff IVY SO 11ca1785

Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Adam T. Klein (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Adam T. Klein (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Cyrus Mehri (See above for address) ATTORNEY TO BE NOTICED
Ellen L. Eardley (See above for address) TERMINATED: 04/02/2015
Kelly M. Dermody (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

V.
Defendant
MORGAN STANLEY DW, INC. TERMINATED: 04/24/2007

represented by Grace E. Speights MORGAN, LEWIS & BOCKIUS, LLP 1111 Pennslyvania Ave, NW Washington, DC 20004 (202) 739−5189 Fax: (202) 739−3001 Email: grace.speights@morganlewis.com

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 7 of 16

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Kenneth J. Turnbull MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178 (212) 309−6055 Fax: (212) 309−6001 Email: kturnbull@morganlewis.com ATTORNEY TO BE NOTICED

Mark S. Dichter MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 (215) 963−5291 Fax: (215) 963−5001 Email: mdichter@morganlewis.com ATTORNEY TO BE NOTICED

Defendant
MORGAN STANLEY & CO. INCORPORATED formerly known as MORGAN STANLEY DW INC.

represented by Grace E. Speights (See above for address) LEAD ATTORNEY

Defendant
CITIGROUP GLOBAL MARKETS INC. 11ca1785

Date Filed 06/22/2006 06/22/2006 06/23/2006 07/07/2006
07/07/2006

# Docket Text
1 COMPLAINT against MORGAN STANLEY DW, INC. (Filing fee $ 350) filed by CHERYL GUISTINIANO, LAURIE BLACKBURN, JOANNE AUGUST−JOHNSON, NANCY REEVES, DEBRA SHAW.(jf, ) (Entered: 06/23/2006)
SUMMONS Not Issued as to MORGAN STANLEY DW, INC. (jf, ) (Entered: 06/23/2006)
Summons (1) Issued as to MORGAN STANLEY DW, INC.. (jf, ) (Entered: 06/23/2006)
2 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Mara R. Thompson, Christopher M. Moody & Whitney Warner. :Address− 310 Fourth Avenue S., Minneapolis, MN 55415 & 4169 Montgomery Blvd. NE, Albuquerque, NM 87109. Phone No. − 612−871−8910 and 505−944−0033. Fax No. − 612−871−9270 and 505−944−0034 by CHERYL GUISTINIANO, LAURIE BLACKBURN, JOANNE AUGUST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Attachments: # 1 Declaration of Mara R. Thompson# 2 Declaration of Christopher M. Moody# 3 Declaration of Whitney Warner# 4 Text of Proposed Order)(Sprenger, Steven) (Entered: 07/07/2006)
3 ADDITIONAL ATTACHMENT Certificate of Service by CHERYL GUISTINIANO, LAURIE BLACKBURN, JOANNE AUGUST−JOHNSON, NANCY REEVES, DEBRA SHAW 2 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Mara R. Thompson, Christopher M. Moody & Whitney Warner. :Address− 310 Fourth Avenue S., Minneapolis, MN 55415 & 4169 Montgomery Blvd. NE, Albuquerque, NM 87109. Phone No. − 612−871−8910 and 505 filed by DEBRA SHAW,, JOANNE AUGUST−JOHNSON,, NANCY REEVES,, CHERYL GUISTINIANO,, LAURIE BLACKBURN,. (Sprenger, Steven) (Entered: 07/07/2006)

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 8 of 16

07/07/2006
07/25/2006
08/03/2006
08/08/2006 08/15/2006 08/15/2006 08/18/2006 08/28/2006
10/23/2006 11/03/2006 11/06/2006 11/13/2006
11/13/2006 11/13/2006
11/16/2006 11/17/2006 11/17/2006

4 Joint MOTION for Leave to Appear and Set Status Conference by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGUST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Attachments: # 1 Text of Proposed Order)(Sprenger, Steven). (Entered: 07/07/2006)
MINUTE ORDER: It is hereby ORDERED that plaintiffs' motion 2 regarding admissions pro hac vice be, and hereby is, GRANTED. Mara R. Thompson, Christopher M. Moody, and Whitney Warner are admitted pro hac vice in this action. Issued by Judge Richard W. Roberts on 7/25/2006. (EHS) (Entered: 07/25/2006)
5 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Mark S. Dichter and Kenneth J. Turnbull. :Address− Morgan, Lewis & Bockius LLP, 1701 Market St., Philadelphia, PA 19103/Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178. Phone No. − 215−962−5291/212−309−6055. Fax No. − 215−963−5001/212−309−6001 by MORGAN STANLEY DW, INC.. (Attachments: # 1 Exhibit Exhibit A − Declaration of Mark S. Dichter# 2 Exhibit Exhibit B − Declaration of Kenneth J. Turnbull# 3 Text of Proposed Order # 4 Certificate of Service)(Speights, Grace) (Entered: 08/03/2006)
6 Consent MOTION for Extension of Time to Respond to the Complaint by MORGAN STANLEY DW, INC.. (Attachments: # 1 Text of Proposed Order # 2 Certificate of Service)(Speights, Grace) (Entered: 08/08/2006)
7 ORDER granting 6 Motion for Extension of Time to answer complaint to 11/1/06.. Signed by Judge Richard W. Roberts on 8/10/06. (lin, ) (Entered: 08/15/2006)
Set/Reset Deadlines: Answer due by 11/1/2006. (lin, ) (Entered: 08/15/2006)
Set/Reset Deadlines: Answer due by 11/1/2006. (lin, ) (Entered: 08/18/2006)
MINUTE ORDER: It is hereby ORDERED that defendant's motion 5 for leave to permit Mark S. Dichter and Kenneth J. Turnbull to appear pro hac vice be, and hereby is, GRANTED. Issued by Judge Richard W. Roberts on 8/28/2006. (EHS) (Entered: 08/28/2006)
8 NOTICE of Change of Address by Cyrus Mehri (Mehri, Cyrus) (Entered: 10/23/2006)
NOTICE of Hearing: Settlement Conference set for 11/13/2006 09:30 AM in Courtroom 4 before Magistrate Judge Deborah A. Robinson. (lin, ) (Entered: 11/03/2006)
CASE REFERRED to Magistrate Judge Deborah A. Robinson for Settlement Conference at November 13 at 9:30am. (jsc) (Entered: 11/07/2006)
9 ANSWER to Complaint by MORGAN STANLEY DW, INC.. Related document: 1 Complaint filed by DEBRA SHAW,, NANCY REEVES,, CHERYL GUISTINIANO,, LAURIE BLACKBURN,, JOANNE AUGST−JOHNSON,.(Speights, Grace) (Entered: 11/13/2006)
10 LCvR 7.1 − CERTIFICATE OF DISCLOSURE of Corporate Affiliations and Financial Interests by MORGAN STANLEY DW, INC. (Speights, Grace) (Entered: 11/13/2006)
Minute Entry for proceedings held before Magistrate Judge Deborah A. Robinson : Settlement Conference held on 11/13/2006. Status Conference set for 1/23/2007 11:00 AM in Courtroom 4 before Magistrate Judge Deborah A. Robinson. (EW) (Entered: 11/13/2006)
11 STATUS REPORT (Joint) by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Speights, Grace) (Entered: 11/16/2006)
12 ORDER that the parites shall continue to engage in their effort to reach a settlemtnt in this action.. Signed by Magistrate Judge Deborah A. Robinson on 11/17/06. (lm ) (Entered: 11/17/2006)
Set Hearing: Status Conference set for 1/30/2007 @ 09:30 AM in Courtroom 4 before Magistrate Judge Deborah A. Robinson. (mm) (Entered: 11/22/2006)

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01/30/2007 02/26/2007 02/27/2007 04/06/2007 04/06/2007
04/06/2007 04/12/2007 04/24/2007 04/24/2007 04/24/2007
04/24/2007
04/24/2007

Minute Entry for proceedings held before Magistrate Judge Deborah A. Robinson : Settlement Conference held on 1/30/2007. (EW) (Entered: 01/30/2007)
13 STATUS REPORT (JOINT) by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Speights, Grace) (Entered: 02/26/2007)
MINUTE ORDER: Based on the parties' most recent status report 13 , it is hereby ORDERED that the parties be, and hereby are, DIRECTED to file another joint status report by April 12, 2007, unless settlement documents are submitted for review before then. Issued by Judge Richard W. Roberts on 2/27/2007. (EHS) (Entered: 02/27/2007)
14 Emergency MOTION for Permanent Injunction (Joint) by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Text of Proposed Order # 2 Declaration of Mark S. Dichter (and attached exhibits)# 3 Declaration of Cyrus Mehri)(Speights, Grace) (Entered: 04/06/2007)
15 ERRATA To Joint Emergency Application For An Injunction by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW 14 Emergency MOTION for Permanent Injunction (Joint)Emergency MOTION for Permanent Injunction (Joint) filed by CHERYL GUISTINIANO, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, NANCY REEVES, MORGAN STANLEY DW, INC., DEBRA SHAW. (Attachments: # 1 Declaration of Mark S. Dichter With Corrected Exhibits A and B)(Speights, Grace) (Entered: 04/06/2007)
16 ORDER granting Joint Emergency Motion 14 for an Injunction. Signed by Judge Richard W. Roberts on 4/6/07. (lcrwr3) (Entered: 04/06/2007)
17 STATUS REPORT (JOINT) by CHERYL GUISTINIANO, LAURIE BLACKBURN, MORGAN STANLEY DW, INC., JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Speights, Grace) (Entered: 04/12/2007)
18 STIPULATION /Defendant's Consent to Plaintiffs' Filing of Amended Complaint by MORGAN STANLEY DW, INC.. (Attachments: # 1 Exhibit Amended Complaint)(Speights, Grace) (Entered: 04/24/2007)
19 AMENDED COMPLAINT against MORGAN STANLEY & CO. INCORPORATED filed by JAN TYLER, ERMA TARANTINO, ELIZABETH REINKE, CHERYL GUISTINIANO, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW.(nmw, ) (Entered: 04/24/2007)
20 Joint MOTION Preliminary Approval by CHERYL GUISTINIANO, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Exhibit Exhibit 1: Settlement Agreement# 2 Exhibit A to Settlement Agreement# 3 Exhibit B to Settlement Agreement# 4 Exhibit C to Settlement Agreement# 5 Exhibit D to Settlement Agreement# 6 Declaration of Steven M. Sprenger# 7 Exhibit A to Declaration of Steven M. Sprenger# 8 Declaration of Cyrus Mehri# 9 Declaration of Joanne Augst−Johnson# 10 Declaration of Nancy Reeves# 11 Declaration of Debra Shaw# 12 Declaration of Jan Tyler# 13 Declaration of Cheryl Giustiniano# 14 Declaration of Laurie Blackburn# 15 Delcaration of Erna Tarantino# 16 Declaration of Elizabeth Reinke# 17 Proposed Order)(Sprenger, Steven) (Entered: 04/24/2007)
21 MOTION for Attorney Fees by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Memorandum in Support of Joint Motion for Preliminary Approval of Class Action Settlement and Class Counsel's Motion for Award of Attorneys' Fees and Expenses)(Sprenger, Steven) (Entered: 04/24/2007)
22 MEMORANDUM re 20 Joint MOTION Preliminary Approval filed by CHERYL GUISTINIANO, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, NANCY REEVES, DEBRA SHAW by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Sprenger, Steven) (Entered: 04/24/2007)

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 10 of 16

05/02/2007 06/26/2007 07/05/2007 07/06/2007 07/06/2007 07/11/2007
07/13/2007 07/17/2007
07/17/2007 07/18/2007 10/01/2007

23 Joint MOTION for Leave to File Appendices 1 and 2 to the Settlement Agreement Under Seal by CHERYL GUISTINIANO, ELIZABETH REINKE, MORGAN STANLEY & CO. INCORPORATED, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Text of Proposed Order)(Speights, Grace) (Entered: 05/02/2007)
24 Joint MOTION for Hearing /To Set Status Conference by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, MORGAN STANLEY & CO. INCORPORATED, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Memorandum In Support of Motion# 2 Text of Proposed Order)(Speights, Grace) (Entered: 06/26/2007)
Minute Entry. Proceedings held before Judge Richard W. Roberts : Status Conference held on 7/5/2007.Final Fairness Hearing set for 10/11/2007 10:30 AM in Courtroom 9 before Judge Richard W. Roberts. (Court Reporter Scott Wallace.) (lin, ) Modified on 7/6/2007 (lin, ). (Entered: 07/06/2007)
25 ORDER granting 23 Motion for Leave to File. Signed by Judge Richard W. Roberts on 7/6/2007. (EHS) (Entered: 07/06/2007)
26 NOTICE Regarding Filing of Sealed Materials, Appendices 1 and 2 to the Settlement Agreement by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 20 Joint MOTION Preliminary Approval (Sprenger, Steven) (Entered: 07/06/2007)
27 NOTICE of Filing Revised Settlement Agreement, Revised Notice of Class Action, and Revised Proposed Order by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 20 Joint MOTION Preliminary Approval (Attachments: # 1 Revised Settlement Agreement# 2 Revised Notice of Settlement, Proposed Settlement Agreement and Settlement Hearing# 3 Revised Proposed Order# 4 Certificate of Service)(Sprenger, Steven) (Revised Appendix 2 to Settlement Agreement FILED UNDER SEAL) Modified on 7/16/2007 (tg, ). (Entered: 07/11/2007)
28 NOTICE Regarding Filing of Sealed Materials for Revised Appendix 2 by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 27 Notice (Other), Notice (Other) (Sprenger, Steven) (Entered: 07/13/2007)
29 NOTICE of Filing Second Revised Settlement Agreement, Revised Class Notice and Revised Proposed Preliminary Approval Order by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 20 Joint MOTION Preliminary Approval, 27 Notice (Other), Notice (Other), Notice (Other) (Attachments: # 1 Second Revised Settlement Agreement# 2 Revised Notice of Class Action, Proposed Settlement Agreement & Settlement Hearing# 3 Revised Proposed Preliminary Approval Order# 4 Certificate of Service)(Sprenger, Steven) (Entered: 07/17/2007)
30 ORDER granting motion 20 for preliminary approval of the Class Settlement, and approving the Notice to the Class. Signed by Judge Richard W. Roberts on 07/17/07. (Attachments: # 1 Notice to Class) (EHS) (Entered: 07/17/2007)
31 ADMINISTRATIVE ORDER NO.1. Issued by Judge Richard W. Roberts on 7/17/07. (lin, ) (Entered: 07/18/2007)
32 Consent MOTION for Extension of Time to File Proposed Final Approval Order and Supplemental Memorandum in Support of Class Counsel's Motion For an Award of Attorneys' Fees and Expenses by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Memorandum in Support# 2 Text of Proposed Order)(Mehri, Cyrus) (Entered: 10/01/2007)

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 11 of 16

10/01/2007
10/03/2007
10/03/2007 10/03/2007 10/04/2007 10/05/2007 10/05/2007 10/05/2007 10/10/2007

33 Joint MOTION for Settlement Final Approval by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Memorandum in Support# 2 Exhibit 1 Mehri Declaration in Support of Final Approval# 3 Exhibit A to Exhibit 1 Mehri Declaration# 4 Exhibit B to Exhibit 1 Mehri Declaration# 5 (SEALED) Exhibit C to Exhibit 1 Mehri Declaration# 6 (SEALED) Exhibit D to Exhibit 1 Mehri Declaration# 7 (SEALED) Exhibit E to Exhibit 1 Mehri Declaration# 8 (SEALED) Exhibit F to Exhibit 1 Mehri Declaration# 9 (SEALED) Exhibit G to Exhibit 1 Mehri Declaration# 10 Exhibit 2# 11 Exhibit 3 Declaration of Mark Patton# 12 (SEALED) Exhibit 4 Declaration of Mark Dichter)(Mehri, Cyrus) Modified on 10/5/2007 (lc, ). Modified on 10/11/2007 (jf, ). Modified on 10/11/2007 (lc, ). (Entered: 10/01/2007)
34 MEMORANDUM re 21 MOTION for Attorney Fees filed by ERMA TARANTINO, CHERYL GUISTINIANO, JAN TYLER, JOANNE AUGST−JOHNSON, ELIZABETH REINKE, LAURIE BLACKBURN, NANCY REEVES, DEBRA SHAW by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Attachments: # 1 Exhibit 1 Mehri Declaration# 2 Exhibit A to Mehri Declaration# 3 Exhibit B to Mehri Declaration# 4 Exhibit C to Mehri Declaration# 5 Exhibit 2 Sprenger Declaration# 6 Exhibit A to Sprenger Declaration# 7 Exhibit B to Sprenger Declaration# 8 Exhibit 3 Moody Declaration# 9 Exhibit 4 Kosen v. American Express Financial Advisors)(Mehri, Cyrus) (Entered: 10/03/2007)
35 ENTERED IN ERROR.....Proposed MOTION for Order Final Order Approving Class Representatives, Certifying Class, Appointing Class Counsel, Approving Settlement Agreement, Awarding Fees and Costs and Dismissing Action Subject to the Court's Continuing Jurisdiction by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Mehri, Cyrus) Modified on 10/4/2007 (jf, ). (Entered: 10/03/2007)
36 ENTERED IN ERROR.....Proposed MOTION for Order Administrative Order No. 2 by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Mehri, Cyrus) Modified on 10/4/2007 (jf, ). (Entered: 10/03/2007)
NOTICE OF CORRECTED DOCKET ENTRY: Document No. re 35 Proposed MOTION for Order Final Order Approving Class Representatives and 36 Proposed MOTION for Order Administrative Order No. 2 was entered in error and counsel was instructed to refile using the Notices category. Counsel was notified not to file Proposed Orders using the Motion(s) category. (jf, ) (Entered: 10/04/2007)
NOTICE OF CORRECTED DOCKET ENTRY: Exhibits Parts 6 and 7 of 33 Joint MOTION for Settlement Final Approval were sealed because they contained personal identifiers. Redacted versions will be filed by counsel. (lc, ) (Entered: 10/05/2007)
37 NOTICE of Filing Redacted Exhibits C and D to the Declaration of Cyrus Mehri in Support of Final Approval by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 33 Joint MOTION for Settlement Final Approval (Attachments: # 1 Exhibit C to the Declaration of C. Mehri# 2 Exhibit D to the Declaration of C. Mehri)(Sprenger, Steven) (Entered: 10/05/2007)
38 NOTICE of Filing of Proposed Final Approval Order and Administrative Order No. 2 by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 33 Joint MOTION for Settlement Final Approval (Attachments: # 1 Text of Proposed Order Proposed Final Approval Order# 2 Text of Proposed Order Administrative Order No. 2)(Mehri, Cyrus) (Entered: 10/05/2007)
MINUTE ORDER: It is hereby ORDERED that class member Janice Grant's request to be heard at the Final Fairness Hearing be, and hereby is, GRANTED, but limited to only those objections that Ms. Grant expressed in writing and provided to the

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 12 of 16

10/10/2007 10/10/2007
10/10/2007 10/10/2007
10/10/2007 10/11/2007 10/11/2007 10/11/2007 10/26/2007

defendant and class counsel by the deadline for filing objections. It is further ORDERED that Mary Harris Evans' request to be heard at the Final Fairness Hearing be, and hereby is, DENIED, because she is not a member of the class. Issued by Judge Richard W. Roberts on 10/10/07. (EHS) (Entered: 10/10/2007)
MINUTE ORDER: It is hereby ORDERED that the requests by Ellen Baker, Chanie Schwartz, Rani Lau, Leigh−Ann McWherter, Audray Lohn, and Sharon Abbey to be permitted to opt out of the class action be, and hereby are, GRANTED. Issued by Judge Richard W. Roberts on 10/10/2007. (EHS) (Entered: 10/10/2007)
39 MEMORANDUM re 33 Joint MOTION for Settlement Final Approval filed by ERMA TARANTINO, CHERYL GUISTINIANO, JAN TYLER, JOANNE AUGST−JOHNSON, ELIZABETH REINKE, LAURIE BLACKBURN, NANCY REEVES, DEBRA SHAW by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Attachments: # 1 Declaration Cyrus Mehri# 2 Exhibit A to Cyrus Mehri Declaration# 3 Exhibit B to Cyrus Mehri Declaration# 4 Exhibit C to Cyrus Mehri Declaration)(Mehri, Cyrus) (Entered: 10/10/2007)
40 NOTICE of Withdrawal of Attorney Sandi Farrell by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Mehri, Cyrus) (Entered: 10/10/2007)
MINUTE ORDER: In light of the fact that Mary H. Musso and Sarah Cugini received notice of the proposed class settlement after the September 10, 2007 deadline to opt−out of the class action had passed, it is hereby ORDERED that the late requests by Mary H. Musso and Sarah Cugini to opt−out be, and hereby are, GRANTED. It is further ORDERED that, in the absence of any showing by the defendant of unfair prejudice from allowing the other late−filed opt−out requests which were received on or before September 27, 2007, the late requests to opt out by Norma Sepulveda, Deborah Konigsberg and Carol Smith be, and hereby are, GRANTED. Issued by Judge Richard W. Roberts on 10/10/2007. (EHS) (Entered: 10/10/2007)
MINUTE ORDER: It is hereby ORDERED that plaintiffs' consent motion 32 for extension of time be, and hereby is, GRANTED, nunc pro tunc. Issued by Judge Richard W. Roberts on 10/10/2007. (EHS) (Entered: 10/10/2007)
41 NOTICE of Filing Redacted Exhibits E, F, and G to the Declaration of Cyrus Mehri in Support of Final Approval by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 33 Joint MOTION for Settlement Final Approval (Attachments: # 1 Exhibit E to Mehri Declaration# 2 Exhibit F to Mehri Declaration# 3 Exhibit G to Mehri Declaration)(Mehri, Cyrus) (Entered: 10/11/2007)
42 NOTICE of Filing Redacted Exhibit by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 33 Joint MOTION for Settlement Final Approval (Attachments: # 1 Exhibit 4: Declaration of Mark Dichter, Redacted)(Mehri, Cyrus) (Entered: 10/11/2007)
Minute Entry. Proceedings held before Judge Richard W. Roberts : Fairness Hearing held on 10/11/2007. The Court granted Anne Marie Slowik's opt−out request made through counsel at the hearing, directed counsel for parties to redact all confidential information in filings in accord with the directives of Local Civil Rule 5.4(f), and directed counsel for Morgan Stanley to refile his declaration with the salary information redacted. (Court Reporter Scott Wallace.) (lin) Modified on 10/23/2007 (zlin). Modified on 10/25/2007 (EHS). (Entered: 10/15/2007)
43 ORDER certifying class, granting final approval to the settlement agreement, approving the award of attorneys fees, and dismissing action subject to limited continuing jurisdiction. Signed by Judge Richard W. Roberts on 10/26/2007. (EHS) (Entered: 10/26/2007)

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10/26/2007 11/15/2007 11/27/2007 12/03/2007
12/03/2007 12/04/2007 12/04/2007 12/17/2007 12/19/2007
01/03/2008 01/03/2008 04/09/2008
06/02/2008
06/03/2008 06/03/2008
06/10/2008 06/12/2008

44 ADMINISTRATIVE ORDER NO. 2. Signed by Judge Richard W. Roberts on 10/26/2007. (EHS) (Entered: 10/26/2007)
45 MOTION to Enforce Final Order and to Enjoin Claims by MORGAN STANLEY & CO. INCORPORATED (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Text of Proposed Order)(Speights, Grace) (Entered: 11/15/2007)
46 Consent MOTION to Withdraw Motion to Enjoin Claims by MORGAN STANLEY & CO. INCORPORATED (Attachments: # 1 Text of Proposed Order)(Speights, Grace) (Entered: 11/27/2007)
MINUTE ORDER: It is hereby ORDERED that defendant's consent motion 46 to withdraw its motion 45 to enforce be, and hereby is, GRANTED, and its motion 45 to enforce be, and hereby is, WITHDRAWN. Issued by Judge Richard W. Roberts on 12/3/07. (EHS) (Entered: 12/03/2007)
48 Letter from Jeremy W. Parham "Let this be filed" by Judge Richard W. Roberts. (jf, ) (Entered: 12/04/2007)
47 ORDER TO SHOW CAUSE. Defendant's Show Cause Response due by 12/17/2007. Plaintiff Class Counsel's response due by 12/21/07. Signed by Judge Richard W. Roberts on 12/4/2007. (EHS) (Entered: 12/04/2007)
Set/Reset Deadlines: Response to Show Cause due by 12/17/2007.,Reply to Show Cause due by 12/21/2007. (lin, ) (Entered: 12/04/2007)
49 RESPONSE TO ORDER OF THE COURT re 47 Order to Show Cause Regarding Class Member Teresa Grubman filed by MORGAN STANLEY & CO. INCORPORATED. (Speights, Grace) (Entered: 12/17/2007)
50 RESPONSE TO ORDER TO SHOW CAUSE by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW re 47 Order to Show Cause. (Attachments: # 1 Declaration of Steven M. Sprenger# 2 Exhibit A# 3 Certificate of Service)(Sprenger, Steven) (Entered: 12/19/2007)
51 MEMORANDUM ORDER relating to [48, 49, 50], granting Teresa Grubman's late request to opt out of the class. Signed by Judge Richard W. Roberts on 1/2/08. (EHS) (Entered: 01/03/2008)
52 Letter of 12/3/07 from Jeremy Parham to Judge Roberts; Attachment (1) (lin, ) (Entered: 01/03/2008)
53 NOTICE OF WITHDRAWAL OF APPEARANCE as to JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Mehri, Cyrus) (Entered: 04/09/2008)
MINUTE ORDER: Counsel for the parties are hereby advised that the Special Master contacted Chambers with a question about the manner in which he should file a sealed report in this case. Counsel are hereby ORDERED to file memoranda by June 9, 2008, addressing the Special Master's question. Issued by Judge Richard W. Roberts on 6/2/2008. (DCL) (Entered: 06/02/2008)
Set/Reset Deadlines: Memoranda due by 6/9/2008 (zlin, ) (Entered: 06/03/2008)
54 Joint MOTION for Order for Procedures for the Submission of the Special Master's Report and Recommendation to be Filed Under Seal by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Text of Proposed Order)(Mehri, Cyrus) (Entered: 06/03/2008)
55 ORDER granting 54 Motion for Order setting certain procedures. Signed by Judge Richard W. Roberts on 6/9/08. (lin, ) (Entered: 06/10/2008)
56 NOTICE Regarding Filing of Sealed Materials (Report & Recommendation of Special Master Thomas A. Warren, and Exhibits A−G) by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW

Case: 1:06-cv-1142 As of: 06/10/2019 07:55 PM EDT 14 of 16

12/17/2008 12/19/2008 01/09/2009 01/09/2009 02/11/2009
03/10/2009 03/11/2009 03/23/2009
03/23/2009 03/23/2009
06/26/2009 06/23/2011

(Sprenger, Steven) (Entered: 06/12/2008)
MINUTE ORDER: It is hereby ORDERED that counsel of record file by January 9, 2009 a joint memorandum and proposed order addressing the issue raised in the Special Master's letter dated December 5, 2008, a copy of which he e−mailed to all counsel of record. Issued by Judge Richard W. Roberts on 12/17/2008. (DCL) (Entered: 12/17/2008)
57 Letter from Thomas A. Warren. "Let this be filed" by Judge Richard W. Roberts on 12/16/08 (jf, )FILED UNDER SEAL on 3/23/2009 per Minute Order of 3/20/09 (jf, ). (Entered: 12/19/2008)
58 Joint MOTION for Leave to File the Parties' Joint Memorandum in Support of the Special Master's Request Under Seal by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Text of Proposed Order)(Mehri, Cyrus) (Entered: 01/09/2009)
59 Joint MOTION to Seal the Special Master's December 5, 2008 Letter to the Court re 57 Letter by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW (Attachments: # 1 Text of Proposed Order)(Mehri, Cyrus) (Entered: 01/09/2009)
MINUTE ORDER: Counsel for the parties and the Special Master are hereby advised that plaintiff Joanne Augst−Johnson notified Chambers by letter of her earlier unsuccessful requests to counsel and the Special Master for information pertaining to her case. Counsel and the Special Master are hereby ORDERED to confer and file memoranda jointly or separately by March 11, 2009, addressing the requests and giving justifications, if there are any, why this issue should not be resolved by a mutually selected mediator as called for in Section X of the Settlement Agreement. Issued by Judge Richard W. Roberts on 2/11/09. (DCL) (Entered: 02/11/2009)
60 RESPONSE TO ORDER OF THE COURT Memorandum in Response to Minute Order filed by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (Mehri, Cyrus) (Entered: 03/10/2009)
61 ORDER directing parties to resolve dispute in accordance with Section X of the Settlement Agreement, and order to class counsel directing service. See Order for additional information. Signed by Judge Richard W. Roberts on 3/11/2009. (DCL) (Entered: 03/11/2009)
MINUTE ORDER: It is hereby ORDERED that the parties' motions 58 59 to seal the Special Master's December 5, 2008 letter 57 to the Court and the parties' joint memorandum in support of the Special Master's request be, and hereby are, GRANTED. The clerk is DIRECTED to seal these filings consistent with the parties' requests. Issued by Judge Richard W. Roberts on 3/23/2009. (DCL) (Entered: 03/23/2009)
62 ORDER re 57 Letter of the Special Master (FILED UNDER SEAL) Signed by Judge Richard W. Roberts on 3/21/2009. (mm) (Entered: 03/23/2009)
63 JOINT MEMORANDUM IN SUPPORT OF re 57 Letter from Thomas A. Warren. "Let this be filed" by Judge Richard W. Roberts on 12/16/08 (jf, )FILED UNDER SEAL on 3/23/2009 per Minute Order of 3/20/09 by JAN TYLER, ERMA TARANTINO, CHERYL GUISTINIANO, ELIZABETH REINKE, LAURIE BLACKBURN, JOANNE AUGST−JOHNSON, NANCY REEVES, DEBRA SHAW. (jf, ) (Entered: 06/19/2009)
Leave to File Denied by Judge Richard W. Roberts. Plaintiff's Motion for cm/ecf password. (jf, ) (Entered: 06/30/2009)
64 ENTERED IN ERROR.....NOTICE of Letter to the Court by JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, MORGAN STANLEY & CO. INCORPORATED, MORGAN STANLEY DW, INC., NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, ERMA TARANTINO, JAN TYLER (Mehri, Cyrus) Modified on 6/24/2011 (jf, ). (Entered: 06/23/2011)

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06/24/2011 06/29/2011
06/29/2011 09/19/2011
11/18/2011 11/18/2011 12/01/2011 12/08/2011 02/16/2012
03/30/2012 06/22/2012

NOTICE OF CORRECTED DOCKET ENTRY: Document No. re 64 Notice (Other), Notice (Other) was entered in error and counsel was instructed to refile said pleading in proper format in accordance with the rules.(Counsel should review LCvR 5.1 (b) CORRESPONDENCE WITH COURT)(jf, ) (Entered: 06/24/2011)
65 Joint MOTION for Hearing by JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, MORGAN STANLEY & CO. INCORPORATED, MORGAN STANLEY DW, INC., NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, ERMA TARANTINO, JAN TYLER (Attachments: # 1 Exhibit MSSB Consolidated Settlement Agreement, # 2 Exhibit Key Differences Between Original and Proposed Settlement Agreements)(Mehri, Cyrus) (Entered: 06/29/2011)
66 NOTICE of Appearance by Ellen Louise Eardley on behalf of All Plaintiffs (Eardley, Ellen) (Entered: 06/29/2011)
MINUTE ORDER: The parties jointly proposed to seek transfer of a related case from the Northern District of California to this Court for consideration of a proposed consolidated settlement agreement. The California case has not appeared on this Court's docket yet, but upon review of the joint filing, it may suggest that the parties viewed a status conference as a prerequisite to a transfer rather than as an adjunct to it. This Court is prepared to move forward with a transferred and consolidated related case without the need for a status conference preceding a transfer, but would contemplate a status conference as appropriate after the transfer occurs. Accordingly, the joint motion 65 for a status conference is DENIED without prejudice to renewing it after the transfer occurs. Issued by Judge Richard W. Roberts on 09/19/2011. (DCL) (Entered: 09/19/2011)
67 ORDER directing the parties to file a joint status report on or before December 1, 2011. Signed by Judge Richard W. Roberts on 11/17/2011. (DCL) (Entered: 11/18/2011)
Set/Reset Deadlines: Joint Status Report due by 12/1/2011 (hs) (Entered: 11/18/2011)
68 STATUS REPORT by JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, MORGAN STANLEY & CO. INCORPORATED, MORGAN STANLEY DW, INC., NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, ERMA TARANTINO, JAN TYLER. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit)(Eardley, Ellen) (Entered: 12/01/2011)
69 ORDER directing that Civil Action No. 11−1785 be administratively closed, and directing that all future filings be filed only under Civil Action No. 06−1142. Signed by Judge Richard W. Roberts on 12/08/2011. (DCL) (Entered: 12/08/2011)
70 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Kelly M. Dermody, :Firm− Lieff, Cabraser, Heimann & Bernstein, :Address− 275 Battery Street, 29th Floor, San Francisco, CA 94111. Phone No. − (415) 956−1000. Fax No. − (415) 956−1008 by RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL (Attachments: # 1 Memorandum in Support, # 2 Declaration, # 3 Text of Proposed Order)(Eardley, Ellen) (Entered: 02/16/2012)
MINUTE ORDER: It is hereby ORDERED that the plaintiffs' motion 70 be, and hereby is, GRANTED, and that Kelly M. Dermody is admitted to appear pro hac vice. Issued by Judge Richard W. Roberts on 03/30/2012. (DCL) (Entered: 03/30/2012)
71 Joint MOTION for Settlement Approval by RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL (Attachments: # 1 Exhibit Exhibit 1− MSSB Consolidated Settlement Agreement, # 2 Exhibit Exhibit 2− Key Differences of Consolidated Settlement, # 3 Exhibit Exhibit 3− MSSB Notice to Current Employees, # 4 Text of Proposed Order Proposed Order)(Eardley, Ellen) (Entered: 06/22/2012)

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09/06/2012
10/09/2012 10/10/2012 10/31/2012
11/13/2012
02/15/2013 04/02/2015
09/29/2015
09/29/2015 04/06/2016 04/07/2016

72 STATUS REPORT Joint by RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL. (Attachments: # 1 Text of Proposed Order Approving Consolidated Class Action Settlement)(Eardley, Ellen) (Entered: 09/06/2012)
73 ORDER granting preliminary approval to the consolidated settlement agreement. Parties directed to respond by October 31, 2012. See Order for additional information. Signed by Judge Richard W. Roberts on 10/09/2012. (DCL) (Entered: 10/09/2012)
Set/Reset Deadlines: Responses due by 10/31/2012 (hs) (Entered: 10/10/2012)
74 NOTICE of Filing of Proposed Notice to Current Employee Class Members by RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CITIGROUP GLOBAL MARKETS INC., CHERYL GUISTINIANO, MORGAN STANLEY & CO. INCORPORATED, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL re 73 Order (Attachments: # 1 Exhibit Proposed Notice to Current Employee Class Members)(Eardley, Ellen) (Entered: 10/31/2012)
MINUTE ORDER: It is hereby ORDERED that the parties' joint proposed notice to female financial advisors and registered financial advisor associates 74 be, and hereby is, APPROVED. Lead Class Counsel and Counsel for Morgan Stanley shall distribute forthwith the notice to current employee class members. Should current employee class members file any objections to the Consolidated Settlement Agreement, counsel for the parties shall have as a deadline for filing responses to the objections 30 days after the deadline for current employee class members to file objections. Issued by Judge Richard W. Roberts on 11/13/2012. (DCL) (Entered: 11/13/2012)
75 ORDER APPROVING THE CONSOLIDATED CLASS ACTION SETTLEMENT AGREEMENT. Signed by Judge Richard W. Roberts on 2/14/13. (rje) (Entered: 02/15/2013)
76 NOTICE OF WITHDRAWAL OF APPEARANCE as to RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL. Attorney Ellen L. Eardley terminated. (Eardley, Ellen) (Entered: 04/02/2015)
77 Proposed MOTION for Order to Extend the Consolidated Settlement Agreement by RENEE FASSBENDER AMOCHAEV, JOANNE AUGST−JOHNSON, LAURIE BLACKBURN, CHERYL GUISTINIANO, DEBORAH ORLANDO, NANCY REEVES, ELIZABETH REINKE, DEBRA SHAW, IVY SO, ERMA TARANTINO, JAN TYLER, KATHRYN N. VARNER, JUDY WEIL (Attachments: # 1 Exhibit Proposed Order Approving the Motion to Extend the Consolidated Settlement Agreement, # 2 Exhibit Stipulation to Extend the Consolidated Settlement Agreement)(Mehri, Cyrus) (Entered: 09/29/2015)
78 Joint STATUS REPORT. (See Docket Entry 77 to view document)(jf) (Entered: 09/30/2015)
Case reassigned to Judge Colleen Kollar−Kotelly. Judge Richard W. Roberts has retired and is no longer assigned to the case. (ztnr) (Entered: 04/06/2016)
79 ORDER GRANTING the parties' 77 Motion to Extend the Consolidated Settlement Agreement, effective October 1, 2015 through September 30, 2017. Signed by Judge Colleen Kollar−Kotelly on April 7, 2016 nunc pro tunc to September 30, 2015. (Attachments: # 1 Exhibit Stipulation to Extend Consolidated Settlement Agreement) (NS) (Entered: 04/07/2016)