Legal Roundup: Racial Discrimination Claims Rising, Tuna Brand Accused of Price-Fixing and More

The latest court decisions involving risk management and the insurance industry.
By: | June 22, 2020

Morgan Stanley’s Long-Time Diversity Officer Sues for Racial Discrimination, Retaliation

The Case: Marilyn Booker, who spent 16 years as the global head of diversity at Morgan Stanley, sued the company for racial discrimination and retaliation.

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Booker had been the public face of diversity at the firm, appearing on TV and even testifying at a congressional hearing.

“She believes she was fired because she pushed too hard to get senior executives in [the wealth management] division to embrace her plan to restructure a program for training black financial advisers,” according to the New York Times.

She also called a new pledge of $30 million for diversity efforts “a drop in the bucket” compared to Morgan Stanley’s billions in earnings.

A Morgan Stanley spokesperson said the bank strongly rejected the allegations and is “steadfast” in its “commitment to improve the diversity of our employees and have made steady progress.”

Scorecard: The case has just recently been filed and has not yet come to a resolution.

Takeaway: The Black Lives Matter movement and a national appetite to reverse institutional racism could lead to similar cases. There have already been plenty of banks sued for racial discrimination in the past.

The New York Times offers this historical framework: “Racial discrimination suits against Wall Street banks are not new. Within the last 15 years, nearly every major bank has settled a class action for tens or even hundreds of millions of dollars. But Ms. Booker is one of the highest-profile black employees to pursue legal action against a bank in recent years.”

Facebook Sues Over Data Extraction

The Case: Facebook has sued two companies that allegedly abused its platforms to offer artificial Instagram likes and expose Facebook passwords and information.

ZDNet reports that “the first of these lawsuits was filed in Madrid, Spain. Facebook sued a local company named MGP25 Cyberint Services, which operates an online website that sells Instagram likes and comments.”

Facebook claims MGP25 purposely evaded Instagram’s restrictions on fake engagement. Facebook also sued Mohammad Zaghar, the owner of Massroot8.com, in San Francisco.

“The website claims to allow users to manage multiple Facebook accounts at once, but Facebook alleges that Zaghar’s service steals users’ Facebook passwords once they sign up for an account. The social network says Zaghar then uses these passwords to surreptitiously access and scrape users’ accounts and harvest data from their friends,” according to ZDNet.

Scorecard: These cases were just recently filed and have not yet come to a resolution.

Takeaway: As tech companies feel more scrutiny from users and government officials to guard against bots, fake accounts and fake engagement, they’re taking matters into their own hands.

Bumble Bee Tuna’s Former CEO Gets Prison Sentence for Price-Fixing

The Case: Christopher Lischewski had been accused of working with competitors to fix the price of canned tuna.

He was indicted in May 2018 by a federal grand jury in San Francisco and prosecutors said the “scheme affected over $600 million worth of canned tuna sales,” the New York Times reports.

The scheme was unearthed during a potential merger deal between the parent company of Chicken of the Sea and Bumble Bee.

Scorecard: Lischewski was sentenced to 40 months in prison and ordered to pay a $100,000 fine — less than the maximum 10-year sentence and $1 million fine he was facing.

Bumble Bee was ordered to pay a $25 million fine while Star Kist received a $100 million fine.

Takeaway: Antitrust authorities take price fixing seriously in many industries. Just recently, the nation’s largest egg producer Cal-Maine Foods was accused of selling eggs at a 300% markup during the COVID-19 pandemic.

Amazon and Valentino Team Up to Sue Over Shoe Counterfeits

The Case: Amazon and Valentino have sued Kaitlyn Pan Group, LLC and Hao Pan over counterfeit shoes.

The popular Garavani Rockstud shoe, for example, “retails for between $425 and $1,100, while the Pan versions sell for significantly less, around $100,” according to TechCrunch.

“While the shoes are not being sold as Valentino and do not use the Rockstud branding, they could easily be mistaken for them (and may have even been promoted using that keyword when they were still being sold on Amazon).”

Scorecard: The suit was just recently filed and has not come to a resolution.

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“Amazon said that any proceeds that result from the suit will go straight to Valentino itself.” Amazon and Valentino did not immediately disclose how much money they are seeking in damages. 

Takeaway: Amazon has been attempting to raise its profile in the luxury fashion world for quite some time. The retail giant has faced backlash over knock-offs and a lack of knowledge of the luxury business.

Some lament that the platform lists a $400 pair of jeans the same way it lists a $10 pair.

Going after counterfeits is a great way for Amazon to court luxury retailers. TechCrunch says: “Amazon has been making huge efforts to raise its game in fashion, and so it’s extremely important that it fights against the image that it’s a fertile ground for selling and buying illegal knock-off items of famous brands.” &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]