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Money Management

Dark side at Fidelity: Women describe culture of bias, revenge

The trouble for Erika Wesson at Fidelity Investments began with an anonymous email.

"Maybe you can go out there and do another deal where you lose millions. Stupid Bitch!" a copy of the 2008 message reads.

Ms. Wesson was then a Fidelity analyst and, by her account, the only woman on its real estate team for institutional investors. The email — sent from a Yahoo account whose address was a crude comment on her anatomy — said she would be fired.

From there things got worse.

Before long, Ms. Wesson became embroiled in a years-long discrimination fight with the mutual fund giant — one that sheds light on new allegations about the treatment of women who accuse men of discrimination.

Fidelity strenuously denies Ms. Wesson's account, which, along with the 2008 email, is laid bare in hundreds of pages of court documents in a case still unfolding in state court in Boston, where the company is based.

On Thursday, Ms. Wesson's story hit her hometown papers. The details are emerging after two prominent Fidelity money managers were dismissed in recent weeks over allegations of sexual harassment, exposing what some insiders have characterized as a men's club mentality in parts of the company.

Six complaints

Ms. Wesson's complaint is one of at least six cases alleging discrimination against women at Fidelity in the last decade, according to a review of state records and court files. Companies usually resolve such grievances behind closed doors, and settlements forbid women from discussing them. So, the cases offer a rare look into disputes over the way women are treated at one of the world's largest money management firms, which oversees $2.3 trillion for 25 million customers.

Of the six complaints filed with the Massachusetts Commission Against Discrimination, the state agency that initially investigates such matters, three were dismissed and three were settled — including Ms. Wesson's. The other two involved allegations of a double standard for women who have relationships with co-workers and retaliation against a female employee for reporting harassment.

In rare public remarks, Abigail Johnson, heir to the Fidelity fortune and now CEO, has promised to root out the mistreatment of women. On Oct. 23, in a video made available to Fidelity's 40,000 employees and in a speech the next day at a Washington conference, she vowed to fight sexual harassment. In a September interview, she promised to recruit more women.

Confidential settlement

Ms. Wesson will not be one of them. Fidelity paid her $500,000 in 2011 and promised to provide good job references as part of a confidential settlement.

But Ms. Wesson claims she has been blackballed in the industry and says Fidelity is to blame. Six years later, after about 60 interviews, the Vanderbilt MBA has not found another job in finance. In 2015, she filed a breach-of-contract suit in Suffolk County Superior Court in Boston.

"The facts of this case present a troubling picture of what happens to talented women, particularly in male-dominated fields, who dare to speak up about the discrimination they face," said Ellen Zucker, Ms. Wesson's attorney. "Too often, they find themselves without a place to turn for support, made the target of unfair scrutiny and told it is they who no longer fit in and should leave."

Fidelity calls her suit baseless.

"Meritless claims are brought against Fidelity as they are against every large employer," said Vincent Loporchio, a spokesman. "In many instances, the cases are dismissed. Even in cases where there are settlements, one cannot draw the conclusion that the case had any merit. Companies on occasion settle cases simply to avoid the exorbitant costs and inconvenience of litigation."

'Outstanding' rating

In 2007, Ms. Wesson began working at Fidelity's Pyramis Global Advisors, which managed money for institutional investors. From 2008 on, Ms. Wesson, who was in her 30s, was the only woman on the acquisition team, which scouted for deals across the U.S., she said in court papers, which noted she received positive reviews that included ratings of "exceeding expectations" and "outstanding."

In 2010, Sujit Sitole, who was junior to her but acting as her boss, told her she wasn't getting ahead because she "didn't drink beer, watch football or eat meat," she said in her lawsuit. He advised her to play a stereotypical female role, taking a "back seat" by remaining silent even when she knew the answer to a question asked by a managing director, she said.

Mr. Sitole maintained his words had been misconstrued, and he had, in fact, said Ms. Wesson didn't need to do any of those things to be part of the group, according to a deposition from one of his supervisors.

Fidelity officials later suggested she would be better off leaving the company, Ms. Wesson said.

No disparaging

In her settlement, the company agreed to give her a positive reference — including the phrase "I have no reservations recommending Erika for employment" — and make no disparaging comments about her.

Afterward, employers showed plenty of interest in hiring her because of recommendations such as this one, from a Boston lawyer: "Erika is a strategic thinker, detail-oriented, she sees the forest and the trees. ... I highly recommend her."

In 2011, Marc Davidson, a managing director at real estate firm AEW Capital Management, reached out to Ms. Wesson's former boss, Michael Elizondo, after hearing glowing reports about Ms. Wesson. Mr. Elizondo offered only that Ms. Wesson had worked for him, Mr. Davidson recalled.

"When you get a response like that, you just stop and don't ask further questions," Mr. Davidson testified, according to a court filing. He dropped her as a candidate.

Vanishing opportunities

In 2012, Bradley Weismiller, an executive at money manager Brookfield Asset Management, described Ms. Wesson as "very sharp" in an email after he spoke with her for about an hour, according to one of Ms. Wesson's court filings. One of his colleagues called her background "ideally suited" to their style of investing.

But, later, Ms. Wesson testified that Mr. Weismiller told her Brookfield had heard from one of her former co-workers that she had "left on very bad terms" and, in the small real estate industry, her background was no longer considered "pristine." Mr. Weismiller declined to comment.

Also that year, after Marc Cardillo, a managing director at investment consulting firm Cambridge Associates, met Ms. Wesson, he shot an email to Jeffrey Gandel, another of her former Fidelity bosses: "hubba hubba - how'd you let her go?" Later, presumably after hearing why from Mr. Gandel, the consultant got an email from Ms. Wesson, which he forwarded to Mr. Gandel adding the word "Crap!," according to one of Ms. Wesson's court filings. Cambridge Associates declined to comment.

Taunting email

In 2014, years into Ms. Wesson's fruitless job search, Enrique Bellido, former director of construction management at Fidelity, sent her an email: "Karma is a bitch isn't it Erika?"

In response to Ms. Wesson's filings, Fidelity called much of her evidence little more than hearsay and also said it wasn't responsible for her former supervisors' comments because they no longer worked there. Fidelity, itself, it said, had never been asked for a reference. In 2011, the year Ms. Wesson left the company, her former unit spun off from Fidelity to become Long Wharf Capital, which declined to comment. Ms. Wesson's filings say Fidelity treats Long Wharf as an affiliate for tax purposes; Fidelity says no corporate relationship exists.

Around the same time Ms. Wesson was working at Fidelity, another woman seemed well on her way to the highest reaches of the mostly male world of money management.

Alicia Frank, who researched emerging markets stocks, was only in her 30s and earning as much as $650,000 a year. If all went well, she would become a portfolio manager, making her eligible for millions in annual pay.

But, in 2007, she became romantically involved with Bob von Rekowsky, who managed Fidelity's emerging markets fund, according to court records. Both were married. He told the human resources department about the relationship.

At first, Fidelity asked the two to keep their relationship "invisible," according to the company. Later, managers said the two had created "significant turmoil" because they had been spending so much time together that other analysts were complaining about favoritism.

The company then sought to enforce a policy prohibiting managers from dating subordinates. Ms. Frank said that Mr. von Rekowsky, though in a senior role — he was paid as much as $3 million a year, according to court records — was not her direct supervisor.

Fidelity said the couple were given the chance to decide who would transfer within the company or leave, but Ms. Frank maintains she was pressured to leave. The firm said it offered to give Ms. Frank a comparable job, and she had instead chosen to resign in 2009. Ms. Frank said the offer was a step down.

Ms. Frank also leveled an accusation at the supervisor asking her to move to another role: Eric Wetlaufer, the chief investment officer for the group overseeing funds that invest in international stocks and one of Fidelity's top money management executives.

Double standard?

Mr. Wetlaufer was having an "illicit extra marital affair" with his own subordinate in Hong Kong, she claimed in her July 2010 filing with the Massachusetts anti-discrimination agency. He left the company three months after Ms. Frank's departure and four months before she filed the complaint. Mr. Wetlaufer is now head of public market investments for Canada's pension fund. He declined to comment.

Ms. Frank divorced her husband and married Mr. von Rekowsky, who stayed at Fidelity until December 2016. At Fidelity, her replacement, who was male, was paid more than she was, according to her complaint. Ms. Frank declined to comment.

In the third settled complaint, Heather DaSilva, an accountant for one of Fidelity's subsidiaries, said her supervisors retaliated against her in 2008 after one of their friends was forced to leave the company for sexually harassing her and other women. Fidelity didn't respond to questions about the case.

In her state filing, Ms. DaSilva said the human resources department didn't address the problem. Instead, it offered her three months of severance. Fidelity had been more generous to the man she accused of harassing her, she said. He walked away with six months of pay.