Skip to main content
Unpublished Paper
From Lily Bart to the Boom Boom Room: How Wall Street’s Social and Cultural Response to Women Has Shaped Securities Regulation
ExpressO (2009)
  • Christine Sgarlata Chung, Albany Law School
In Edith Wharton’s 1905 novel House of Mirth, Lily Bart learns in one brutal moment what happens to women who get tangled up with the stock market. Though she is beautiful and well-born, Lily is vulnerable when she seeks salvation in the stock market – she has no family to support her, no fortune of her own, no training in business matters, and no socially acceptable means of acquiring money, save marriage. When the husband of a friend (Gus Treanor) offers to help Lily by speculating in the stock market, Lily agrees. And when Treanor begins presenting Lily with money, she gladly accepts what she assumes are trading profits. One night, however, after luring Lily to his house under false pretenses, Treanor makes his true intentions known. After accusing Lily of leading him on, Treanor demands sexual favors, telling Lily that she must “pay up.” Even though Lily manages to extricate herself from the house without submitting to Treanor’s demands, she is ruined by this encounter. Cast off by her social circle, Lily eventually leaves her last pennies to Treanor, takes an overdose of sleeping medication and dies alone in a boarding house room. One hundred years later, when senior Morgan Stanley executive Zoe Cruz sought her fortune in the stock market, she appeared to have none of Lily Bart’s limitations. Ms. Cruz was a long-time Wall Street warrior. She began working on Wall Street in 1982 after graduating from Harvard College and Harvard Business School. After proving herself on the trading desk, she spent more than twenty years working her way up through management, eventually earning millions of dollars per year in compensation, and billions in profits for her employer. By 2007, she was the heir apparent for the CEO job. Just months after praising Ms. Cruz’s market insights and her contributions to the Morgan Stanley’s bottom line, however, Ms. Cruz’s boss called her to his office. With the subprime mortgage crisis unfolding, losses mounting and his own job under pressure, Ms. Cruz’s boss said that he had “lost confidence” in her and asked her to resign. After a ten minute meeting, Ms. Cruz left the building and never went back. In the wake of termination, some former colleagues questioned whether the woman they had nicknamed “the Cruz Missile” had ever understood the markets, trading or how to manage financial risk. In this article, I make three points about Wall Street’s social and cultural response to women. First, I argue that even though Lily Bart’s fictional ruin and Ms. Cruz’s rise and fall are separated by more one hundred years, “stories” like theirs are typical, and reflect Wall Street’s fixed and surprisingly narrow social and cultural response to women who wish to trade securities or work in the financial industry. Drawing upon industry narratives, reports in the popular press and selected academic commentary, I show that women have been social and cultural outsiders on Wall Street for more than one hundred years. Wall Street narratives express women’s outsider status in two ways: they either omit women from the ranks of market participants entirely, as if they are (and should remain) absent from the business of buying and selling securities, or they relegate women to the status of hapless victims or allegedly incompetent shrews. In either case, women are presumed to lack the skills and characteristics necessary to navigate on Wall Street, and they are thought to face ruin and/or expulsion if foolish enough to venture into the markets alone. Second, drawing upon selected case law, legislative history and administrative agency reports, I argue that Wall Street’s social and cultural response to women has become embedded in our system of securities regulation. Reform-minded legislators, courts and regulators have used stories of vulnerable women – particularly widows stripped of their lifesavings – to curb abusive sales practices on Wall Street. Wall Street firms have use women’s alleged emotionality and lack of financial competence to justify excluding women from employment, and to rebut sexual harassment, discrimination and retaliation claims. Third, having exposed links between Wall Street’s image of women and legal norms, I argue that Wall Street’s singular narrative for women has come at a cost. Securities regulation purports to be a gender-neutral exercise. It uses supposedly gender-neutral standards like “reasonable,” “sophisticated” and “unsophisticated,” and it assigns rights and obligations based on purportedly gender-neutral roles like “broker” and “customer.” In reality, however, relevant standards and systems reflect unstated gender norms about who is sophisticated and skilled when it comes to the markets, and who is not. And because the law, with its tendency to use labels and stereotypes, has seized upon Wall Street’s image of women as incompetent outsiders, it has reinforced and in some cases legitimized Wall Street’s gender norms. As a result, instead of examining the skills and characteristics of individual market participants, we assume that some people are competent merely because they “look the part” (say, Bernard Madoff) and we are skeptical of those who do not (say, Zoe Cruz). We presume that some people are vulnerable and in need of protection (poor widows), but we are skeptical when people who do not fit this stereotype allege investment abuse. And, we assume that norms and systems impact all system participants equally, when in reality, they may reflect the experiences and perspectives of one or more dominant groups. As a first step in understanding how Wall Street’s gender norms have affected securities regulation, this paper examines Wall Street’s social and cultural response to women over the past one hundred years, and traces links between Wall Street’s gender norms and case law, legislative history and administrative agency activity. Going forward, this paper urges scholars to ask hard questions about the gendered unpinning of securities law, so that our system of securities regulation can be as complex and nuanced as the women and men who work with or in the securities industry today.
Publication Date
August 10, 2009
Citation Information
Christine Sgarlata Chung. "From Lily Bart to the Boom Boom Room: How Wall Street’s Social and Cultural Response to Women Has Shaped Securities Regulation" ExpressO (2009)
Available at: