Morgan Stanley has agreed to pay $46 million (£23 million) to settle a mass lawsuit in which 2,700 female employees accused the US investment bank of discrimination over their pay and promotion prospects.

Under the terms of the settlement, which is subject to court approval, the bank will also introduce new methods to combat gender discrimination and will establish new initiatives for training female brokers for management jobs.

Morgan Stanley, which has around 8,000 private client stockbrokers, estimates that over the next five years it will spend $7.5 million on training and that female brokers' pay will go up by $16 million.

The class action lawsuit was filed in June by six former Morgan Stanley female brokers. However, more than 2,700 claimants who worked at the firm's retail brokerage division between August 2003 and now have joined the case.

The suit alleged that Morgan Stanley discriminated against women in the way it offered staff training and mentoring and the process through which it assigned client accounts between brokers.

Some of the claimants also said they were discriminated against during a round of layoffs in August 2005, when the company fired around 1,000 underperforming brokers. Others have claimed they were discriminated against on the basis of age.

Caroline Gundeck, head of the newly established office of diversity at Morgan Stanley’s global wealth management unit, said: "We are firmly committed to the initiatives we will be undertaking to attract and retain women financial advisers."

The brokers were represented by three US law firms: Mehri & Skalet, Sprenger & Lang and Moody & Warner.

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