Investment banker sues Jefferies, alleges pregnancy bias

By Jonathan Stempel

NEW YORK (Reuters) – Jefferies Group LLC is being sued by a former female investment banker who accused it of stripping away her bonus and derailing her career because she became pregnant.

In a lawsuit filed on Wednesday night in federal court in Manhattan, former Senior Vice President Shabari Nayak said, Jefferies harbors “deep institutional biases” against women, reflected when two top bankers told her that her “priorities” needed to change after she had become pregnant with her first child.

Nayak said Jefferies’ actions and refusal to address her complaints forced her to resign in March while on maternity leave, ending her 11-1/2-year investment banking stint and leaving her industrial sector group with 32 men and no women as senior vice presidents or managing directors.

Nayak “delayed announcing her pregnancy as late as possible because she feared her career would be derailed,” her lawyer, Scott Grubin, said in a statement. “We are determined to hold Jefferies accountable for its discriminatory conduct.”

The lawsuit seeks unspecified compensatory and punitive damages against Jefferies, a New York-based unit of Leucadia National Corp. Nayak now works at BMO Capital Markets, brokerage industry records show.

A Jefferies spokesman said the investment bank plans to defend against the lawsuit, which is “entirely without merit” and concerns “the past compensation of an individual who voluntary resigned to work at a competing bank.”

Over the years, many investment banks have been accused of gender bias, including denial of pay or career opportunities to women when they become pregnant.

Nayak said she had been on track to become a Jefferies managing director in 2016 before she told co-defendants Peter Scott, head of industrials investment banking in the Americas, and Christopher Kanoff, global co-head of investment banking, of her pregnancy last August.

She said Scott offered to help her find a “less demanding” role, perhaps in human resources, and that he and Kanoff denied her a 2015 bonus though she brought in 45 percent more revenue than in 2014, when she received a six-figure bonus.

In contrast, she said a male colleague in her group who performed similar work received a “substantial” bonus for 2015.

BMO did not immediately respond to requests for comment.

The case is Nayak v. Jefferies Group LLC et al, U.S. District Court, Southern District of New York, No. 16-06528.

(Reporting by Jonathan Stempel; Editing by Jonathan Oatis and Steve Orlofsky)