This week, the #MeToo movement arrived on Wall Street. On Tuesday, a female employee of Point72 Asset Management, the investment firm run by the billionaire Steven Cohen, filed a lawsuit against Cohen and the company, alleging gender discrimination. The suit comes at a complicated moment for Cohen, a onetime Wall Street titan whom the Securities and Exchange Commission banned from managing investor money for two years as a result of securities-fraud charges that were filed in 2013. The ban expired earlier this year, and Cohen has been preparing to return to the hedge-fund business. The corporate world has become newly receptive to allegations of gender discrimination and harassment, and it seems likely that the lawsuit’s timing could affect Cohen’s potential new investors, who are already being asked to overlook a lot if they hand him their money.
The behavior described in the lawsuit, which was filed by Lauren Bonner, an associate director at Point72, will be familiar to many women who have worked in finance, an industry that remains overwhelmingly male. The lawsuit begins with an allegation that the word “pussy” was written on a whiteboard inside the office of Point72’s president, Douglas Haynes, and remained there for several weeks in 2017. “During this time,” the suit reads, “female employees were humiliated and ashamed as they were forced to work and participate in meetings held in Haynes’s office, including with other male executives, as the PUSSY Board drifted above them, taunting them with repulsive references to their own bodies.”
The suit goes on to list an array of charges related to the exclusion of and discrimination against female employees, covering day-to-day treatment, hiring, promotions, and compensation. Of the hundred and twenty-five portfolio managers that Point72 employs, all but one are men, the suit alleges; the same goes for the firm’s thirty-two managing directors, thirty-one of whom are male. The committee in charge of hiring investment professionals for the company is composed solely of men, according to the suit, and women who are considered for employment must demonstrate higher skills and qualifications than male candidates. The firm’s chief operating officer refers to women employees as “girls,” Bonner alleges, and holds “no girls allowed” meetings. Bonner says that after she complained to human resources about “unacceptable behavior” by a male superior at the company the man was allowed to remain on the “promotion committee” that determined her eligibility for a promotion; she says the committee later labelled her “abrasive and too aggressive.” In response to the lawsuit, Point72 issued a statement saying, “The firm emphatically denies these allegations and will defend itself in a more appropriate venue than the media.”
According to Bonner’s attorney, Jeanne Christensen, a partner at the Wigdor law firm, women who work at Wall Street companies have been reluctant to go public with charges against their employers in the past—cases tended to be settled out of court—but things could be changing. “We don’t file many complaints against hedge funds, but that doesn’t mean we don’t represent a lot of women in cases like this,” she said. “The industry takes keeping things quiet a lot more seriously.” Women in the industry typically work long hours, for years, to claw partway up the hierarchy at a bank or investment firm, and the reputational and financial risks inherent in lawsuits dissuade many from aggressively pursuing cases in court. In Bonner’s case, according to her suit, her 2018 “target” compensation is three hundred thousand dollars in salary and two hundred and twenty-five thousand dollars in bonuses, which she claims is a fraction of what her male counterparts earn. “She’s risking a lot, because, in the industry, everyone knows one another—it’s not that big,” Christensen said. “I think there are a lot of women who—when they’re at this level—don’t want to do anything to tarnish this reputation that they’ve worked for for so long, and they’re more willing to just move on and not do something about it.”
The lawsuit suggests that Cohen’s past record may have played a role in Bonner’s analysis of whether she could successfully bring a case against him and his firm. “This case is important precisely because it shows that, in 2018, wealthy, financially sophisticated, global companies such as Point72 continue to believe that they operate above the law,” the suit says, an apparent allusion to the historic securities-fraud charges brought against Cohen’s former hedge fund, S.A.C. Capital Advisors, in 2013.
S.A.C. had been known as one of the most aggressive and successful hedge funds in the industry, producing impossible-sounding returns year after year. (The firm had only one negative year: 2008.) The indictment—which followed a seven-year investigation by the U.S. Attorney’s office in Manhattan and the S.E.C.—created a damning portrait of Cohen and his fifteen-billion-dollar firm and suggested that S.A.C. had bent the rules for years. The U.S. Attorney charged eight of Cohen’s former employees with insider trading, and said that “institutional practices” at S.A.C. had led to securities violations that were “substantial, pervasive and on a scale without precedent in the hedge fund industry.” (Charges against two of the former employees were later dismissed.) While Cohen was never individually charged, S.A.C., of which he was the sole owner, pleaded guilty to the government’s charges and agreed to a $1.8 billion settlement. Cohen subsequently shuttered S.A.C., and in 2014 he opened Point72 as a family office, exclusively managing his personal fortune of more than ten billion dollars.
Since then, Cohen has been plotting a return to the hedge-fund business. He has pushed out many of the top S.A.C. executives who had been with the firm through its legal troubles, and he instituted new compliance measures, including high-tech employee-surveillance mechanisms. Douglas Haynes, the president of Point72, who is named in Bonner’s suit, was hired from McKinsey in 2014 as part of Cohen’s effort to bring more professionalism to his company. Still, in employment law, courts can consider evidence of wrongdoing in an unrelated area when they are considering allegations of discrimination, and may infer that a pattern of breaking one set of rules makes it more likely that the company might break another.
In the meantime, Christensen offered a bit of advice for other companies on Wall Street. “We already know there’s lots of nervous male executives out there,” she said, speaking generally. “The question is, are they going to clean things up before somebody outs them? Sitting back and hoping that nobody’s going to say anything, I don’t think it’s a very good strategy right now.”
