Morgan Stanley deal doesn't address women's issues ...

THE last time "Morgan Stanley" and "sex" found themselves in the same sentence was when the firm fired an analyst named Christian Curry after he posed naked for a gay porn magazine.

The sexual discrimination suit filed against the New York firm on behalf of former bond saleswoman Allison Schieffelin promised to be even more enjoyable.

This was a sight worth paying to see: the daily spectacle of a giant Wall Street firm explaining, in the words of Schieffelin's original complaint, "company sponsored and paid-for excursions to 'topless' and 'bottomless' men's clubs."

And then: poof. Just as we all moved to the edge of our seats and reached our own personal tipping points, Morgan Stanley switched the lights on and the lurid music off. The firm shelled out $54 million to settle the suit out of court, $12 million of which Schieffelin will take home.

Amazingly, many people appear to view this as a good thing--a triumph for the wronged woman, an act of prudence for the big Wall Street firm. It isn't. It's a lie.

Either Morgan Stanley did sexually discriminate against Schieffelin, or it did not. If not (as the firm still clearly wants us to believe), the settlement is an appalling shakedown. Morgan Stanley simply decided it was worth $54 million to prevent Morgan Stanley women from describing in a court of law the behavior of Morgan Stanley men.

If Morgan Stanley is willing to pay $54 million to avoid the rest of us hearing, day in and day out, how their sales people entertain clients at strip clubs, where will it end? How much money can the next group of unhappy female employees shake out of, say, Citigroup? If Morgan Stanley is innocent of sexual discrimination, it is guilty of setting an unwholesome example.

But what if Morgan Stanley is guilty as charged? That is the more interesting case. If Schieffelin was, as she claimed, cheated out of the chance to make $2 million to $3 million a year as a managing director instead of the $1.35 million she made as a principal, the $12 million goes some way to easing her pain. But it does little to address the problem faced by women on Wall Street.

Man's world

The curious problem of women on Wall Street is that even the ones making a million and a half dollars a year too often feel like outsiders, or oddballs, or people whom their firms might be about to screw. And they are!

The day after the settlement, The New York Times ran a suggestive chart. It showed that on Wall Street, 82 percent of the salespeople are men; off Wall Street, a bit more than half are. On Wall Street, 71 percent of computer programmers are men; off Wall Street, just a bit more than half are. And so on.

More than any other sphere of American economic life, Wall Street is still a man's world. But The New York Times' numbers don't begin to capture the nature of the problem. Women could occupy half the sales jobs on Wall Street and still not feel as if they belonged in the way that men feel they belong. The Morgan Stanley sales desk is beside the point. It's the trading desk that needs reforming.

If you toted up the trillions of dollars of financial decisions made each day--by traders at big Wall Street firms as well as money managers--you'd find, I'm sure, that far more than 82 percent of the dollars are controlled by men.

Here's the nub of Wall Street's woman problem: Power on Wall Street accumulates in the hands of the person who controls the capital; the social attitudes and the tone of daily Wall Street life follow the lead of the person who controls the capital; and the person who controls the capital is still, invariably, a man.

And not just any man. A manly man, with testosterone flowing through his veins in volumes seldom seen outside professional sports. Men who make big financial decisions are, of course, not always lustful, hairy beasts. But there is a tendency among men who control huge sums of money to view the opposite sex as a source of entertainment rather than profit. If Morgan Stanley is paying its salespeople to take clients to strip clubs, it is because that is where many of Morgan Stanley's clients want to be taken.

What is to be done? Even if the law might somehow forbid the natural desires of male controllers of capital, the air will remain heavy with their urges and impulses.

No, the only way to make Wall Street friendly to women is to put women in charge of a lot more capital.

It's interesting that a full three decades since women first flooded Wall Street, men have kept such a grip on capital. One of two things must be true. Either the market has determined that men are inherently superior to women at making financial decisions and it would be a costly social experiment to insist that more women have that power, or the tendency for money to accumulate in male hands is a hugely expensive artifact.

If trillions of dollars are being run by men rather than more qualified women, a lot of money is being wasted. So which is it?

Michael Lewis, author of "Liar's Poker," "The New New Thing" and "MoneyBall: The Art of Winning an Unfair Game," is a columnist for Bloomberg News.