Morgan Stanley has agreed to settle a class action alleging racial discrimination brought by over 1,000 African-American and Latino brokers in northern California with a $16 million fund. The settlement has not yet been approved by the court. The firm said: "This settlement is an innovative way to address historic industry issues and will advance our efforts to foster diversity and professional success within our financial adviser force." James Finberg, a lawyer for the plaintiffs, said: "The settlement has a monetary relief and injunctive relief, which is a win-win." The firm will also increase diversity and improve anti-discrimination policies and will work with industrial psychologists to develop hiring, retention and development initiatives for African-American and Latino financial adviseors and broker trainees. Its power-ranking system, which grades performance to see who gets the clients of brokers who leave, will also be altered.