SHARE THIS ARTICLE Share Tweet Post Email

The unusual thing about the sexist comment from money-management billionaire Ken Fisher wasn’t what he said or how many people heard him—it was that he got into trouble for saying it. For at least a decade, the head of Fisher Investments, an empire that oversees more than $115 billion, has been known to make casual references to sex and genitalia in front of his colleagues and peers. People who’ve worked with him say the usual response to his inappropriate language is nervous laughter or awkward silence. He suffered no fallout when he said at a conference last year that his life’s regret was not having more sex, after comparing a mutual fund that brags about performance to a bachelor who walks up to a woman in a bar and asks her to sleep with him.

That response shifted in October when Fisher made a crude analogy between the art of wooing clients and seducing women. This time, the unwritten industry rule that values discretion and relationships above most everything else didn’t stop at least three people in the audience from saying they were floored. Then several clients started fleeing: pension funds in Michigan, then in Philadelphia, Boston, and Iowa; soon after, Fidelity Investments and Goldman Sachs Group Inc. Altogether they pulled about $4 billion. It took two days after the conference for Fisher to apologize—at first he said he didn’t get what the fuss was about.

More than painting a picture of rich men behaving badly, tales like the Fisher saga show that powerful parts of the finance industry haven’t caught up with the times. Other stories this year, from assault and unwanted touching at ritzy London firms to allegations of harassment in a New Jersey brokerage, reveal why. Even in an era when just about every company says it champions diversity and craves inclusion, a corporate machine silences employees and maintains Wall Street’s status quo. To workers in all sorts of jobs, the mechanics will sound familiar: forced arbitration, captive human resources departments, high-priced lawyers, and a culture of fear. But the finance industry’s mastery of this system has prevented the revolution of the past two years from disturbing it. Instead, there’ve been only rare moments of revelation that hint at what future change might look like.

Wall Street can still resemble a fraternity with nicer houses. Men built almost all the big banks, private equity firms, hedge funds, and asset-management companies. Even if men can no longer openly expense trips to strip clubs, they continue to run the industry. Beneath the sanitized surface is an old mix of entitlement, exclusion, and secrecy. Once the #MeToo movement began, finance, unlike so many other businesses, didn’t have a major reckoning or, in some corners, experience much reflection. “The primary difference for women that speak out on Wall Street vs. other industries is money. And money is power, and Wall Street has the most,” says Jeanne Christensen, a partner at the employment law firm Wigdor LLP, whose clients have fought major banks and hedge funds. “Going up against them is not the same.” Some finance executives even reacted to #MeToo by steering clear of their female colleagues, as if they were the problem.

“The system was invented by firms to protect firms’ own interests”

Journalists who write about the landscape of Wall Street often first encounter its self-protective mechanisms when they try to report on its bad behavior. In the earliest days of #MeToo, when women in finance quietly shared stories about being grabbed, propositioned, and kissed out of the blue, most said they had too much to lose if they spoke out. In the cases when women were prepared to talk openly, Wall Street’s public-relations specialists jumped into action. They told reporters not to trust these women—in one recent case because she was flirty, in another because she was too aggressive, in a third because she’s past her prime.

Then there’s an arm of the system that tries to prevent workers from speaking out in the first place. At the 331-year-old insurance exchange Lloyd’s of London, a woman who says a senior manager drunkenly attacked her in a pub was convinced by HR that it would be bad for her career to pursue a grievance. At London’s M&G, which manages about $450 billion, when a woman complained about a top money manager, HR told her to smile less around him and dress more conservatively. Christensen, the attorney, says most of her Wall Street clients feel they can’t even go to HR.

The few women who try to sue are sent behind the closed doors of the arbitration system. Brokerages helped pioneer the shadow legal process decades ago by winning Supreme Court cases that allowed the practice to spread to corporate America. Now, workers at 2 out of 3 big nonunion companies are bound by mandatory arbitration. It spares companies from the embarrassment and cost of lawsuits, while keeping victims from learning about one another and banding together. It also gives employees worse odds of winning, and smaller judgments if they do, says Alex Colvin, who teaches dispute resolution at Cornell. Several tech giants have stopped making employees sign away their right to sue over harassment, but the finance industry isn’t budging from a system it says is cheaper and quicker but fair.

Lee Stowell disagrees. She’s fighting to stay out of arbitration. The bond saleswoman sued her former firm, Cantor Fitzgerald, saying she put up with years of locker-room behavior and lost her job when she complained. The brokerage argued that she had to keep her complaint behind closed doors, and the two are currently tangled in a battle over where she’ll get to air her grievances. (In March, a judge sided with Stowell; Cantor denies her allegations and is appealing.)

Unlike other industries, Wall Street has a self-regulatory arm that runs its own arbitration hearings; judge and jury are replaced by a small panel of decision-makers, mostly white and male. Transcripts of a case between a risk specialist and the big bank he used to work for showed an absurdist maze. One arbiter fell asleep, another left for the bathroom at a key moment, and lawyers bickered over a granola bar. There’s less testimony, fewer documents, and rarely an appeal. “We shouldn’t lose sight of the fact that the system was invented by firms to protect firms’ own interests,” says David Noll, a Rutgers Law School professor who studies legal institutions.

No woman has ever held the top job at any of the six biggest U.S. banks. But even the single most powerful person at Lloyd’s was no match for a culture older than the U.S. itself. When Inga Beale, the first woman to run the insurance exchange, pushed to modernize its sexist attitudes and boozy behavior, men asked one of her friends to have Beale “tone it down.” One anonymous note sent to the chief executive officer’s sixth-floor desk told her to “go and die”; another message said she should stop talking about her bisexuality. Beale left and was succeeded by a man who’d married one personal assistant and then began a relationship with another.

Fisher eventually apologized for his comments and said they were misconstrued. Looking at it one way, the trouble he got into was a fluke, and the billions of dollars of withdrawals were just a slap on the wrist for an executive who’s still running the company. But it could also mark the beginning of a cultural shift. At BlackRock Inc., CEO Larry Fink told the company’s 20 or so highest-ranking officials that their behavior was being held to a higher standard. Two of the men in that group are now gone. The world’s largest asset manager fired them, one just this month, for breaking rules about relationships with colleagues.

There was a brief window this year when it felt like a lot more was about to change. In July, the millionaire financier Jeffrey Epstein stepped off his private jet and was arrested on charges of sex trafficking underage girls. As he sat in prison, it seemed his case was about to trigger a reckoning for the major Wall Street figures who’d embraced and enabled him. Instead, he died. —With Sabrina Willmer and Gavin Finch