Morgan Stanley Dean Witter & Co., one of Wall Street’s largest players, is being sued by the Equal Employment Opportunity Commission. The EEOC, a U.S. government agency that enforces federal civil rights laws and fights employment discrimination, is suing Morgan Stanley in federal court accusing the firm of discriminating against women.

The EEOC says the firm paid its female employees less than men, denied them promotions, and shut them out of important firm social functions. It says the firm demonstrated a pattern of bias against up to 100 female employees in its institutional equity division.

Elizabeth Grossman, an EEOC lawyer, says this is the first major sex discrimination case brought by the agency against a Wall Street securities firm. Morgan Stanley declined to comment.

The suit is based partially on the EEOC’s finding that Morgan Stanley retaliated against saleswoman Allison Schieffelin, after she sued the firm claiming that she was denied a promotion because she’s a woman. Schieffelin filed her complaint against Morgan Stanley in November 1998 and was fired last October.

In June 2000, the EEOC said it had uncovered evidence of “a pattern and practice of discrimination” against Schieffelin and other women at Morgan Stanley. Today’s suit was filed after settlement talks failed. Grossman said, “Wall Street will be a different place for women because Ms. Schieffelin has come forward.”