Predictably, the #MeToo wave is slowly creeping back up on the shores of Wall Street.
It took a new and potentially explosive turn this week. A lawsuit filed by a fund manager at the TCW Group claims that she was not only sexually harassed, but her alleged harasser retaliated by withholding marketing and financial support for her fund. That's what could make this case a very expensive game changer for all of Wall Street, not just one firm or one victim.
First, let's look at this specific case. Sara Tirschwell says TCW managing director Jess Ravich successfully coerced her into sex by threatening to withhold company resources from a fund she managed. Then when she ended the affair, Tirschwell says Ravich followed through on the threat to cut those resources. She was eventually fired from TCW last month.
Tirschwell is suing the Los Angeles-based TCW for $30 million, but if her allegations of retaliation against her fund are true, the financial ramifications could be dire.
A spokesman at TCW says Tirschwell was fired because of "repeated violations of company policy." But at least on paper, she seems like a formidable plaintiff as Tirschwell was named one of the 50 leading women in her industry by Hedge Fund Journal last year.
"Sexual harassment lawsuits may soon come from many more sources than just the alleged victims themselves. For Wall Street firms that have thousands of clients with the means to file those lawsuits, the dam could break any time."
Attorney and managing partner at The Colchester Group Jim Nuzzo says this case is an example of the "shifting ground" in sexual harassment lawsuits across the country. Nuzzo explains that the details of Tirschwell's personal interactions with Ravich are nothing new, but Ravich's use of investor funds means the "chances that multiple plaintiffs will join in this and other possible lawsuits against TCW are quite high."
Think about that for a moment. Tirschwell's case could successfully prove that Ravich and/or others at TCW misused their investors' money in the act of sexual harassment. It's not a stretch to argue that any use of investment firm assets by an alleged sexual harasser could then be used as grounds for shareholder lawsuits. Maybe those assets could even include a company paid-for car used to visit a victim's home, or a company-provided phone used to illicitly call or text a harassment victim.
The point is that sexual harassment lawsuits may soon come from many more sources than just the alleged victims themselves. For Wall Street firms that have thousands of clients with the means to file those lawsuits, the dam could break any time.
Wall Street has dealt with harassment and sexual misconduct waves in the past. Even some of the most astute Wall Street critics say the result is the very overt culture of harassment and blatantly hostile working environments for women are a thing of the past.
But that progress came before this current #MeToo wave. It came before shareholders flexed their legal muscles in this new environment with the $90 million settlement with 21 stCentury Fox late last year. It came before allegations of "decades-long" sexual harassment against Steve Wynn surfaced Friday and sent Wynn shares reeling.
Now, Wall Street could be dealing with investors who never even visited a trading desk demanding some kind of financial payment connected to an inner-office sex scandal.
The Tirschwell case may take years to run its course. Many of the biggest harassment lawsuits against Wall Street firms drag on forever. But if her case encourages more women and their firms' investors to step forward, Wall Street isn't just standing on shifting ground, it's atop an earthquake.
Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
Correction: This article was updated to remove a reference to Harold Ford.
