Wall Street dealmakers are putting new provisions in place to help protect clients in light of the rise of #MeToo movement.
The so-called “Weinstein Clause” is gaining popularity among Wall Street bankers who advise on merger and acquisition deals, according to a report by Bloomberg News. The clause provides a way to protect a buyer client from past scandals among senior executives at the selling company.
“Social due diligence is becoming more and more important and, particularly for founder-centric businesses, money is being put aside to address #MeToo issues,” Gregory Bedrosian, chief executive officer of boutique investment bank Drake Star Partners, told Bloomberg.
Some of the “Weinstein” clauses state that a buyer can take back some money from the selling company if certain sexual misconduct scandals come to light that damages the businesses’ reputation.
The name of the clause alludes to the alleged sexual misconduct accusations made against Hollywood icon Harvey Weinstein. Across male-dominated industries, women are speaking out against long-ignored behavior by some of America’s most powerful executives, including the likes of Charlie Rose, and most recently CBS’ Leslie Moonves.