The inappropriate behavior among the gentlemen's club on Wall Street should finally be a thing of the past. While the United States has been engaged in a debate on workplace sexual harassment and discrimination for years, it appears that the financial sector in America has been slow to adapt. Reports of widespread misconduct against female employees from various institutions have been circulating for weeks. Names like Citigroup have been implicated. The accusation of a female manager is that the bank has tolerated a work atmosphere that is characterized by sexual harassment and derogatory treatment of women. Simultaneously, even one of the most crucial regulators in the financial industry, the Federal Deposit Insurance Corporation (FDIC), has become the subject of extremely unsavory accusations.

An executive in the San Francisco office of the agency is alleged to have invited employees to a strip club. A manager from the FDIC branch in Denver reportedly engaged in sexual relations with an employee, shared the details with colleagues, and encouraged the woman to consume whiskey during working hours. FDIC auditors allegedly sent explicit photos of their genitalia to female colleagues. Insiders describe a culture where sexual innuendos are commonplace. Women are judged based on their appearance and are disadvantaged compared to male colleagues. Agency head Martin Gruenberg initiated an investigation in response to media reports on the accusations. However, the FDIC chairman himself is under suspicion of having been aware of allegations against executives and not taking decisive action.

In many cases, such as those at the FDIC and Citigroup, these are initially accusations that need to be proven. For instance, Citigroup intends to defend itself against the lawsuit brought by its former manager – asserting that female colleagues should always feel secure in addressing internal "concerns" without fear of retaliation. However, the plaintiff, who worked for Citigroup for 15 years, is not alone in her statement. Other former female employees who wish to remain anonymous also describe a hostile work environment.

At the FDIC, there are cases that can be traced back more precisely. Harrel Pettway, then number two in the legal department, allegedly left an angry and insulting voicemail for a female employee in 2019. At that time, the agency was led by Gruenberg's predecessor, Jelena McWilliams, who, as documented, paid $100,000 to the affected woman as part of a settlement. Pettway retained his job and, under Gruenberg, rose to become the top legal adviser at the FDIC.

The picture emerging is that of a boys' club where men can take liberties and cover for each other.
Misogynistic behavior is certainly always misguided, moronic, and contemptible, irrespective of the perceived context. However, it is more than time for sexual harassment and discrimination to find no place on Wall Street, especially considering the severe consequences such misconduct can have. It not only affects the directly involved parties but also completely unrelated market participants.

This was clearly demonstrated in relation to the banking crisis that occured in the spring. Regional banks like Silicon Valley Bank exhibited significant deficiencies in risk management that regulators should have recognized much earlier. According to FDIC investigations, the failure to recognize these deficiencies is attributed to a shortage of personnel at the agency. The FDIC, with fewer than 6,000 employees, is tasked with ensuring the stability of the US banking system, which comprises over 4,000 institutions. This shortage is exacerbated as FDIC examiners have apparently been leaving the deposit insurance agency in droves for years. Likely due to the misogynistic work atmosphere. Thus, it is time for Wall Street to become aware of the consequences of a too lenient approach to discrimination.