Morgan Stanley has backed out of a potential settlement of a federal lawsuit accusing it of engaging in a discrimination pattern that prevented most women employees from advancing, a lawyer for the Equal Employment Opportunity Commission said Thursday.

The suit, seeking unspecified compensatory and punitive damages, was filed by the EEOC in September 2001 on behalf of sales representative Allison Schieffelin and as many as 100 women in the firm’s institutional stock department.

“We have taken the money portion of the settlement off the table,” a Morgan Stanley lawyer, Emily Nicklin, told Judge Richard Berman of United States District Court at a hearing yesterday in Manhattan.

Morgan Stanley has denied all allegations.

(via New York Times)