Wall Street could finally be forced to change its sexist culture as two long-simmering lawsuits head to trial

In 2005, when Chen-Oster left her position as a vice president at the investment bank and filed a federal complaint about the harassment and gender discrimination she says she experienced there, her youngest child was not yet born. Now, 17 years later, that daughter is a high school student, and Chen-Oster is looking forward to her first trial date against Goldman Sachs—scheduled for next June. 

“We knew at the beginning it would be a long haul—but I’m not sure I expected it to take this long,” she says.

At least she’s now in good company. Chen-Oster is one of 1,400 women suing the investment banking giant for alleged gender discrimination in a class action that could become a landmark case. The lawsuit is one of two against big investment houses that have overcome long odds—and years of court challenges—to be slated for trial in the first half of 2023. Together, those cases could lead to a long-awaited moment of accountability around issues of sexual harassment and discrimination on Wall Street—where the financial services industry, despite rampant and widely acknowledged sexism, has never really had its #MeToo moment. 

“A public trial here would certainly be a tipping point for Wall Street,” says Anne Shaver, a partner at the law firm Lieff Cabraser Heimann & Bernstein and one of the attorneys representing Chen-Oster and her fellow plaintiffs. “It will be a reckoning in an industry that uses every tactic available”—including mandatory arbitration clauses and nondisclosure agreements in severance contracts—”to keep these issues from ever seeing the light of day.”

An MIT graduate who started working at Goldman Sachs in 1997, Chen-Oster says that within a year she had to fend off a colleague’s unwanted sexual advances after a work outing. She alleges that after she eventually reported the incident, she was denied promotions and had responsibilities taken away.

Chen-Oster left Goldman in 2005, and initially filed a gender-bias complaint with the U.S. Equal Employment Opportunity Commission. After five years, the agency closed its investigation but granted Chen-Oster the right to pursue her claims through the courts. She filed a lawsuit in 2010—and, 12 years later, her case has attracted hundreds of other plaintiffs and won class-action status. Their suit alleges that Goldman Sachs systemically pays women less than their male counterparts and under-promotes women relative to men, and that the company’s culture allows sexual harassment and gender bias to flourish. (The estimated damages their class action is seeking so far remains sealed.) 

It’s been a long, bitterly fought 17 years for Chen-Oster—but she’s already won some remarkable victories. After Goldman Sachs spent years trying to get the case thrown out in pretrial motions, a U.S. District Court judge in August set a trial date for Jun. 5, 2023. Last month, the judge also allowed the plaintiffs to release partially unredacted documents with a graphic level of detail about some of their specific allegations, including claims of criminal sexual assault and rape. These details, along with the class action’s sheer size and endurance, have already turned the case into an unusually public referendum on the financial industry, where claims of sexism and harassment are usually dealt with secretly—and where victims still often face steeper professional consequences than the accused. 

Goldman Sachs denies the allegations in the class action. The company “has a long and distinguished record of supporting and promoting women,” a spokesperson says by email, adding that the bank is “unwavering in our commitment to equality and dignity for everyone in the workplace; we have zero tolerance for discrimination, harassment, or retaliation of any kind; and we look forward to making our case in court.” 

Given all of the barriers Chen-Oster overcame on her way to this court date, it’s striking that another long-gestating, high-profile lawsuit might go to trial around the same time. In early 2018, veteran investor Sara Tirschwell filed a lawsuit against her former employer, bond trading giant TCW Group, alleging that she had been sexually harassed by her boss and then fired in retaliation for reporting it. Her suit made headlines for being one of Wall Street’s first, and only, publicly disclosed #MeToo cases—and now, almost five years later, it is also scheduled for trial. Earlier this month, a New York state court judge set a trial date of May 1, 2023, Fortune is one of the first to report. (TCW and the other defendants deny the allegations.)

“Change happens slowly, and then all at once,” Tirschwell says. “Change is still happening very slowly on Wall Street—but maybe this is the moment.” 

A reckoning delayed

Is this what a long-delayed reckoning looks like? Five years after the #MeToo movement went viral, the financial industry seems to have been largely untouched by its consequences, at least when measured by public ousters of individual men behaving badly. But the accelerating momentum of the Goldman Sachs class action, along with the endurance of Tirschwell’s lawsuit against TCW, is drawing new attention to a very well-known—and until now largely unaddressed—problem throughout the industry.

Late this summer, when my Fortune colleagues and I set out to interview many of the women involved in #MeToo, I wanted to talk to women in the financial industry about their experiences. And I was struck by how relatively few of their cases had become #MeToo household names, even though stories about rampant misogyny and misconduct have rocketed around Wall Street for decades.

Some argue that the industry’s legal reckoning far preceded what we now think of as #MeToo. In the late 1990s, for example, Smith Barney paid $150 million to settle a class-action lawsuit alleging systemic gender discrimination and misconduct (though the investment bank did not explicitly admit wrongdoing). The case stemmed from the infamous “Boom-Boom Room”—a basement party room at one Smith Barney branch that became shorthand for a culture in which brokers openly discriminated against, harassed, and sexually assaulted some of their female colleagues.   

But decades later, the financial industry has never had its Harvey Weinstein or Steve Wynn moment: No boldface names have faced a demise over sexual harassment of employees. The closest it’s come was the long-delayed indictment of the late hedge fund manager Jeffrey Epstein, on charges related to the sex trafficking of underage girls, and the related professional consequences for some of his associates. (Epstein died in jail while awaiting trial.)

Wall Street women who have come forward with workplace complaints often do so at a cost to their careers and their reputations. Los Angeles–based TCW, which has more than $200 billion in assets under management, maintains that it fired Tirschwell for “repeated compliance violations,” and that she complained about being sexually harassed “only after being informed that her contract would not be renewed due to non-performance.” (A company spokesperson adds that TCW has a “longstanding commitment to a diverse and inclusive culture, and has zero tolerance for any form of harassment or discrimination.”)

Linda D. Friedman, an employment lawyer whose Chicago firm started bringing gender discrimination cases against Wall Street in the late 1980s, isn’t familiar with the specifics of Tirschwell’s case. But in general, she says, “that’s what it looks like today, in individual cases” that turn on “he said, she said” disputes. Often, the “she” in the case is forced to leave, Friedman says, because the company can always find some reason “she isn’t that good at her job.”

There has been some progress over the decades. Among other things, most big Wall Street firms have pledged to bring more gender diversity to their managerial ranks. Goldman Sachs, for one, has set a goal of women making up 40% of its vice presidents globally by 2025 (women made up 32% of its VPs in 2021, and 23.4% of its top executives).

But Friedman, who represented the women suing Smith Barney in the Boom-Boom Room class action, argues that there’s still much to be done, especially in terms of the systemic pay and promotion disparities at issue in the Goldman Sachs case. “The groping and the frat-house environment seem to have improved,” she says, “but we still struggle in the wage gap, and we still struggle to enter management ranks or the C-suite.” 

Chen-Oster and some of her fellow plaintiffs might disagree about the lack of groping, or worse; the recently unsealed documents in their lawsuit include seven different allegations of rape or attempted rape between 2000 and 2011, plus other claims of less serious physical assaults. But even if overt assault and harassment have diminished, the financial industry’s failure to promote women remains visible at its highest levels. It was only two years ago that one of the country’s largest banks, Citigroup, named Jane Fraser CEO, making her the first woman ever to run a big Wall Street firm. All of its major competitors are still run by men. 

There are some very practical reasons why most legal efforts to challenge this bias don’t survive very long on Wall Street. Many large companies still require their employees to sign mandatory arbitration clauses, which require all kinds of employer-employee disputes to be settled in private arbitration. Big companies defend these clauses as a way to avoid the legal costs and headaches of court battles. But in practice, since the results are confidential, they have had the effect of immediately muzzling any sort of claims—and headlines—alleging bias or other repeated bad behavior. 

“Arbitration doesn’t allow for things to be more broadly broadcasted, or for there to be greater consequences,” Chen-Oster says, adding that banks “use arbitration as a way to shut people out.”

A new federal law, signed by President Biden in March, decrees that employers can no longer force sexual misconduct claims into arbitration; now, even if employees have signed an arbitration clause, they are free to file lawsuits over assault or harassment in court. However, the law does not apply to claims of gender bias or any other discrimination—which are at the heart of the Goldman Sachs class-action lawsuit. And Goldman, which in 2021 defended its use of arbitration clauses for sexual harassment despite shareholder pressure, spent the past 12 years successfully fighting to send many of Chen-Oster’s fellow plaintiffs to arbitration. 

Not that Goldman is alone in this. Tirschwell, who climbed the ranks at hedge fund Davidson Kempner before starting her own fund for TCW, says that in her almost 30 years on Wall Street, “TCW is the only place that I worked where I didn’t have an arbitration clause.”

Two different paths to trial

As a middle-management vice president at Goldman Sachs, Cristina Chen-Oster didn’t have to sign an arbitration clause while she worked there, although some of her would-be fellow plaintiffs did. She initially filed her 2010 lawsuit with two additional ex-Goldman employees—Lisa Parisi, a former managing director, and Shanna Orlich, a former associate. But in pretrial hearings, Goldman’s lawyers successfully argued that Parisi’s employment contract had included an arbitration clause and that she was thus ineligible to join the lawsuit. At one point, the lawsuit represented up to 2,300 current and former Goldman employees; after a judge narrowed the class and required other plaintiffs to opt in to remain in the lawsuit, that number shrunk back down to 1,400.  

As those numbers suggest, Chen-Oster hasn’t had to go it alone. It’s one of many divergences between her experiences and Tirschwell’s, as both women have spent years trying to publicly hold Wall Street accountable. 

Chen-Oster has the distinct media advantage of going up against a well-known enemy. Goldman Sachs, with its huge public profile and lingering whiff of “vampire squid” supervillainy, has a mainstream consumer brand recognition that TCW simply doesn’t. Its alleged bad behavior is always going to grab more attention than the relatively obscure dealings of a bond trading firm’s distressed-debt operation. Witness the recent widespread coverage of Bully Market: My Story of Money and Misogyny at Goldman Sachs, a scathing memoir from former Goldman Sachs managing director Jamie Fiore Higgins. (Goldman has told Fortune: “We strongly disagree with Ms. Higgins’ characterization of Goldman Sachs’ culture” and her allegations.)  

For all the time that Chen-Oster has sunk into her lawsuit, and despite the toll it’s taken on her life, she remains upbeat. “There’s been an outpouring of support that I did not expect,” she says, even while acknowledging that “Wall Street is still slow to make real changes.”

Now she’s trying to pay that support forward to other women, including Tirschwell. After Fortune’s #MeToo retrospective published earlier this month, Chen-Oster reached out to Tirschwell on LinkedIn, and the two women are now each planning to attend the other’s trial. “Most of us have felt pretty alone out there,” Tirschwell says, adding that she “was very touched” by Chen-Oster’s support.

‘The price is still very high to complain’

In a midtown New York restaurant, the late-afternoon sun streaming through the floor-length windows, I ask Sara Tirschwell if she has any regrets about publicly sharing her #MeToo story five years ago. She immediately starts tearing up.

The raw emotion is a little unexpected from Tirschwell, a plainspoken fast talker who last year mounted a brief Republican primary campaign for New York City mayor. But when she thinks back to her decision to go public with sexual-misconduct and retaliation claims against her former boss, their CEO, and their company, she’s just not sure that the personal cost has been worth it.

“I honestly don’t know that I would do it all over again,” she says. “I hate being known as that person.”

Tirschwell is a sole plaintiff, as opposed to the 1,400 women suing Goldman, and she’s a lonelier one. Her case has always been a little messy, as many individual #MeToo claims are. Prior to working for TCW, Tirschwell had dated Jess Ravich, the executive who in 2015 helped bring her in to start her own distressed-debt fund at the investment firm. Ravich eventually became her supervisor. In December 2017, Tirschwell complained to TCW’s HR department that Ravich had sexually harassed her and coerced her into sex; nine days later, the investment firm fired Tirschwell, over what it maintains were “repeated compliance violations.” 

In January 2018, Tirschwell sued Ravich, TCW, and CEO David Lippman, seeking $30 million in damages. The case had a setback in 2020, when a judge dismissed many of its claims; but last year, an appeals court reinstated most of them. Now a court date has been set for May 1—just over a month before Chen-Oster and her fellow plaintiffs are scheduled to face off against Goldman, provided that neither case settles in the coming months. 

Ravich has firmly denied wrongdoing. His attorney, Sullivan & Cromwell partner Robert Sacks, tells Fortune that Ravich had nothing to do with Tirschwell’s firing and adds that his client “has always been her biggest supporter at TCW.” In late September, Sacks filed a motion requesting to have Ravich dismissed from the lawsuit. 

Unlike Chen-Oster, who continues to work in the financial industry, Tirschwell paid a steep professional cost. Since filing her lawsuit, she hasn’t been able to find another senior investing job on Wall Street, an industry that she clearly loves. Instead, she’s moved back to her home state of Texas, and is now the CEO of Houston-based YesCare, a private-equity-owned company that administers health care in prisons.

“The price is still very high to complain,” says Friedman, the Boom-Boom Room lawyer. “Even if the [accused] person is removed, it can be career-ending for the woman.”

The one thing Tirschwell is taking some cold comfort in: Those she’s suing have also been leaving TCW, if more slowly. Around the same time that TCW fired Tirschwell, it promoted Ravich to its board of directors. However, in June 2019, he left the company. Then, in August 2021, the Wall Street Journal reported that Lippman would retire as TCW CEO at the end of this year—a report that was vindicated late this summer, when TCW named Lippman’s replacement.

Asked about how she perceives the impact of her case, Tirschwell says, “Did my bringing the lawsuit force much-needed change upon that organization? Yes, but that benefits that organization. And I pay the price for that.”

One of the changes at TCW may reflect some of Wall Street’s halting efforts to fix its culture—even as it raises the persistent question of how much individual breakthroughs for female leaders represent systemic change.

In early September, a few days before I first met Tirschwell, TCW announced that its next CEO would be Katie Koch. She will be the first female chief executive in the firm’s 50-year history (and she’s someone who Tirschwell says she personally has “a lot of respect for”). 

Koch is a “champion for diversity,” TCW proclaimed in a press release. She’s also a veteran investor who spent two decades at one of Wall Street’s most prominent investment banks, where she rose to become a partner and the chief investment officer of its $300 billion public-equity group. 

That firm? Goldman Sachs.