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TMX Group is investigating allegations of sexual harassment against CEO Lou Eccleston, dating from his time at Bloomberg LP.Darren Calabrese/The Globe and Mail

The board of directors of TMX Group Ltd., owner of Canada’s largest stock exchange, is studying allegations of sexual harassment against chief executive officer Lou Eccleston while he was an executive at financial data giant Bloomberg LP in the 1990s.

The allegations came to light in an investigative story about Michael Bloomberg published on Tuesday by American publication Business Insider. Mr. Eccleston was a senior executive at Bloomberg LP for 14 years until departing in 2002. He joined TMX Group in 2014, after leaving S&P Capital IQ.

TMX acknowledged the allegations in a short statement. “We take allegations of this nature seriously and the TMX Group board is looking into this matter,” the company said.

Mr. Eccleston has been given credit for a turnaround at TMX Group, based in part on strong performance in its financial data group. The company adopted stronger rules for listing cannabis companies, and as a result will not be hurt as badly as smaller exchanges by the bear market in that sector. TMX Group shares have tripled since late 2015, but they dropped 4.7 per cent Wednesday to close at $106.89.

The allegations were levelled more than two decades ago in filings for a complaint to the New York Division of Human Rights by a former Bloomberg employee. The complainant, Sekiko Sakai-Garrison, alleged that she faced sexual harassment at work as well as discrimination because of her gender and because she was pregnant.

The filings have been written about before, notably when Bloomberg founder Mr. Bloomberg ran for his first term as New York City’s mayor in 2001, but full details of the allegations involving Mr. Eccleston appear to have never been published. Business Insider dug through the filings because Mr. Bloomberg recently announced he is running to be the Democratic candidate for U.S. president.

According to the publication, Bloomberg LP has faced 40 employment lawsuits from 64 individuals since 1996. ​

Mr. Eccleston was not named as a respondent in Ms. Sakai-Garrison’s complaint or in any other employee lawsuits. He declined to comment Wednesday.

In filings related to her case, Ms. Sakai-Garrison accused Mr. Eccleston of helping foster a hostile working environment where there were a variety of acts and comments relating to sexual matters, and where women were reluctant to complain out of fear of retaliatory action.

She alleged that many female employees detested the culture at Bloomberg but were afraid of retaliation if they spoke up. “People who complain to protect their personal rights or professional status at the company are labelled by Eccleston as trouble makers, and are subject to financial or territorial retribution," she said.

A number of former colleagues provided witness interviews to the Division of Human Rights in support of Ms. Sakai-Garrison.

In a summary of an interview with former employee Jim Feingold, he said he left the company in 1994 after two years because he was “dissatisfied with the raunchy attitude" there.

Rowland Hunt, a former Bloomberg employee who was fired in March 1991, supplied a sworn statement in support of Ms. Sakai-Garrison’s depiction of Bloomberg’s culture. Mr. Hunt described a “particular incident” at the 1990 Bloomberg Christmas party that he said remained “vivid” in his memory.

“I saw the manager Lou Eccleston giving body shots" to two women, he said. "Both women were sales account representatives. He did this also with other women.” Mr. Hunt defined a “body shot” as “licking salt off the neck” while embracing, kissing and squeezing. “It was a ribald scene,” he alleged.

According to the Village Voice, which focused on the allegations against Mr. Bloomberg in a 2001 story, the company settled Ms. Sakai-Garrison’s case without admitting wrongdoing.

While the allegations are dated, Richard Leblanc, a professor of governance, law and ethics at York University, said even past behaviour has become something that boards of directors consider. “Conduct risk is one of the biggest risks for boards right now. They don’t want surprises and they want full, true and plain disclosure by all executives," he said in an interview. "You’re making a significant hire and you’re hiring the reputation and the brand of the person as well.”

“Boards are doing independent background checks, reference checks, criminal background checks and I’m even seeing psychometric testing," Dr. Leblanc said. The landscape has changed considerably since the #MeToo movement erupted in 2017. “I’m seeing complete disclosure obligations of anything that you’ve said and done in your past that could bring reputational harm to the company,” he added.

Although TMX has pledged to review the allegations, Michael Wright, an employment lawyer with the firm Wright Henry LLP, said it may be difficult to complete a thorough study considering how much time has passed and the fact that none of the people who raised complaints are employees of TMX.

“It’s not like a criminal proceeding. There’s no ability to compel participation,” he said. “The challenge for an organization that says ‘we want to get to the bottom of this’ is it may face a number of hurdles.”

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