FDIC Launches Committee Investigating Alleged Boys’ Club Culture Of Sexual Harassment, Partying

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Topline

The Federal Deposit Insurance Corporation has formed a typical committee to analyse allegations of rampant intersexual harassment, misogyny and partying astatine nan slope regulator arsenic it deals pinch fallout from nan definitive allegations made successful a Wall Street Journal report past week.

Federal Deposit Insurance Corporation Chairman Martin Gruenberg during a House Committee connected ... [+] Financial Services Hearing connected November 15, 2023. (Photo by SAUL LOEB/AFP via Getty Images)

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Key Facts

The typical committee will beryllium chaired by 2 FDIC committee members: acting Comptroller of nan Currency Michael Hsu, a Democrat, and committee personnel Jonathan McKernan, a Republican, multiple outlets reported.

The committee approved nan committee via a solution that sets up guardrails to support its independence, including prohibiting FDIC Chairman Martin Gruenberg (who was investigated antecedently for allegations he angrily lashed retired astatine employees) from participating successful nan review, and requiring nan extracurricular rule patient nan agency hired to behaviour an soul probe, BakerHostetler, to study its findings straight to nan committee.

The committee’s statement comes aft nan Journal published an exposé earlier this period based connected interviews pinch much than 100 existent and erstwhile employees, including much than 20 women who quit, describing a pervasive civilization of misogyny, intersexual harassment, drinking and partying, facilitated by nan rigorous recreation schedule labor were required to support arsenic they visited banks crossed nan country.

Key Background

Some of nan women interviewed by nan Journal said they were passed complete for promotions and penalized if they didn’t socialize pinch their antheral colleagues. One erstwhile female worker who discontinue successful 2013, Lauren Lemmer, told nan outlet she received an unsolicited naked photograph from a antheral workfellow and was followed backmost to her edifice room by different antheral trainee successful Dallas. She besides said her supervisor and different antheral labor visited a portion nine together. Other labor described nan agency’s edifice successful Washington, D.C., arsenic a statement destination for out-of-town trainees, wherever puking disconnected of nan 11-story tile was viewed arsenic a right-of-passage. The agency grounded to tamp down connected nan civilization and took a lackadaisical attack to investigating complaints of intersexual harassment, according to a 2020 FDIC inspector wide study obtained by nan Journal that recovered nan FDIC received 12 intersexual harassment allegations from 2015 done 2019.

Tangent

The Journal study prompted calls for Gruenberg’s resignation, chiefly from Republicans who are captious of caller slope regulations spearheaded by Gruenberg, who was nominated for a 2nd word by President Joe Biden successful 2022. Democratic lawmakers, including Sen. Sherrod Brown (Ohio) and Sen. Elizabeth Warren (Mass.) called for an independent probe into nan allegations. Gruenberg has faced allegations of losing his temper pinch employees, including 1 accusation made by a female worker successful 2008 that led to an soul reappraisal of his conduct, according to documents reviewed by nan Journal. Gruenberg acknowledged nan probe to Senate lawmakers during a proceeding past week, but said he wasn’t “aware of thing that came retired of that review.” Gruenberg made nan admittance aft initially telling nan committee he was ne'er nan taxable of immoderate misconduct allegations.

What To Watch For

The House Financial Services Committee besides plans to unfastened an investigation into nan agency, it said successful a letter to Gruenberg past week, vowing to “focus not only connected nan alleged wide and entrenched misconduct and toxic activity environment, but whether this situation impacted nan information and soundness of nan banking system.” The committee besides said it will analyse Gruenberg’s ain conduct.

WSJRepublicans Heap Pressure connected FDIC's Gruenberg Over Claims of Toxic Workplace

WSJFDIC Hires Independent Firm to Investigate Alleged Harassment, Discrimination astatine Regulator

WSJFDIC Chairman Martin Gruenberg Won't Oversee Misconduct Probe


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