'Honeypot' suit against Morgan Stanley alleges behavior Wall Street has tried to leave behind

If the allegations in a new discrimination lawsuit against Morgan Stanley are true, Wall Street still has a long way to go toward eliminating the sort of behavior it has been trying to clean up for decades.

That's what Lou Straney, a regulatory expert at Arbitration Insight, said of a suit filed on Feb. 23 by financial advisor Tara E. Stewart, who worked for Morgan Stanley in Mount Laurel, New Jersey, from 2019 to 2022. In her legal complaint, Stewart alleges that her former colleague, Evan Silverman, suggested within the first three months of working with her that she run an "operation honeypot" and use her good looks and those of her "other attractive female friends" to "woo" affluent clients.

When Stewart complained of this behavior to Silverman's supervisor, Richard Maratea, the two began to circulate rumors about her personal life and work habits, according to her complaint. She alleges she later became the subject of retaliatory internal investigations after she brought her concerns to a regional manager in September 2021. She resigned in May of the following year.

Her suit, filed in the Superior Court for Burlington County, New Jersey, makes allegations of discrimination and retaliation in violation of the New Jersey Law Against Discrimination, among other charges.

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Silverman declined to comment for this article, and Maratea did not respond to a request for comment. A Morgan Stanley spokesperson said the firm is "committed to maintaining a professional work environment and denies the allegations in the complaint." 

"These allegations were not asserted by Ms. Stewart prior to her voluntary resignation from the firm in May 2022, which triggered her obligation to repay substantial loans," the spokesperson added.

Stewart's lawyer, Erica Domingo of Grungo Law in Cherry Hill, New Jersey, did not immediately respond to a request for comment.

Straney said the allegations are reminiscent of the sorts of behavior Wall Street has been trying to rid itself of since the "Boom Boom Room" scandal of the 1980s. In that, a former employee of the securities firm Shearson/American Express mounted a discrimination suit against the firm's successor, Smith Barney, over complaints of lewd and harassing comments and behavior. The name "Boom Boom Room" referred to a party cove in the firm's Garden City, New York, office.

Straney said Wall Street ever since has "been well aware that all employees are entitled to a safe and professional work environment. This is required, not a suggestion."

Now the key questions for Morgan Stanley, he said, are "what did the firm know, when did they know it, how they responded, and is all of this documented?"

Stewart has been in the financial services industry for 17 years and has experience working with nine firms. Less than a year after being hired to work for Morgan Stanley in Mount Laurel, New Jersey, in early 2019, she was given the position of director of insurance and planning.

Before joining Morgan Stanley, she had stints at Pruco Securities, Hornor, Townsend & Kent and TIAA-CREF. She's now listed as a managing director at Allied Wealth Partners in Parsippany, New Jersey.

Her BrokerCheck page lists two disclosures, including a bankruptcy in 2023. The other concerned ultimately dismissed allegations of fraudulent use of credit cards.

Stewart wrote on her BrokerCheck page, "I am being accused of using a stolen credit card. I believe this is related to my recent victimization by identity theft and/or a mistake."