A US federal judge has approved Morgan Stanley's proposed $16 million settlement to end claims it discriminated against black and Latino financial advisors in its global wealth management group, reported Dow Jones.

The settlement resolves a class action lawsuit filed in the Northern District of California by three women on behalf of 1,300 black and Latino workers claiming they received less pay and fewer promotions than whites, according to court documents filed in San Francisco. The US investment bank denied any wrongdoing.

In issuing preliminary approval, Judge Thelton Henderson said he was "swayed" by an almost identical settlement in October in US District Court for the District of Columbia. In that case the New York-based firm agreed to pay $46 million in a suit claiming it discriminated against women.

In the complaint, the plaintiffs alleged that white male branch managers at Morgan Stanley steered business to white male brokers, depriving blacks, Latinos and women of the opportunity to earn commissions and promotions.

A hearing was scheduled for 16 June to determine final approval for the settlement proposal in Jaffe v. Morgan Stanley.