U.S. probe finds widespread sexual misconduct at FDIC

The Federal Deposit Insurance Corporation must make sweeping changes to address widespread sexual harassment and other misconduct, according to an independent report released on Tuesday that raises questions about the future of the banking regulator's leadership.

The report, prompted by a Wall Street Journal investigation, cited accounts from more than 500 people, including some who alleged FDIC Chair Martin Gruenberg had engaged in bullying and verbal abuse.

Overall, the report by law firm Cleary Gottlieb, paints a picture of an agency at which sexual harassment, racial discrimination and bullying were pervasive at every level and tolerated by senior leaders for years, while complaints about misconduct were met with retaliation.

"For far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct," said the report, adding that those accused of misconduct were frequently reassigned new roles.

Underscoring the agency's toxic culture, officials tasked with addressing the problems exposed by the WSJ reports were themselves the subject of misconduct claims, the Cleary Gottlieb report found.

The findings sparked renewed calls for the ouster of Gruenberg, a Democrat who has been a senior leader at the agency for nearly two decades.

Representative Patrick McHenry, a Republican who chairs the House Financial Services Committee, called for Gruenberg's resignation following the report, saying it made clear the agency needs new leadership.

"The FDIC needs to be fixed. The women and men who work there deserve better," Sherrod Brown, chair of the Senate Banking, Housing, and Urban Affairs Committee, said in a statement. "Chair