Financial firms such as JPMorgan Chase, Aflac, KKR, Blackstone, and Och-Ziff Capital all added #MeToo language to their most recent annual reports, warning investors about potential company harm from harassment.Before 2018, the word "sexual" had been mentioned only once in the risk section a publicly traded financial company's annual report. So far in 2019, it has been in nine different financial companies' public filings.Even though the #MeToo movement has not brought the same reckoning on the finance industry as it has on Hollywood, politics, media, and other sectors, banks, insurance agencies, and hedge funds are still thinking about the risks of a scandal.Or, at least, their lawyers are.Public financial companies have significantly stepped up the use of several #MeToo words and phrases in their 2018 annual reports, according to a review of 10-K filings by the data company Sentieo, specifically in their sections focused on risks facing their businesses.While the word sexual wasn't listed as a risk factor for any financial companies in 2017, by the next year it appeared in filings for three such companies. So far in 2019, the word has appeared in nine companies 10-K's risk section. The use of the word harassment has also increased. In 2017 and 2018, it appeared in seven finance firms annual reports each year. So far in 2019, it has more than doubled to 15 financial-services companies.The updated language in companies annual reports shows that the influence of the movement is being closely monitored by the top brass of the financial industry.Companies that have added the word sexual to their risk sections over the past two years include the private-equity giants KKR and Apollo Global Management; the insurance company Aflac; and Ken Moelis investment bank, Moelis & Co. Major companies such as JPMorgan Chase, the Carlyle Group, and Blackstone were among the firms that have added harassment to their risk factors this year.We have seen #MeToo push out quite a few executives since the wave started so we are not surprised to see language around the topic make its way in SEC filings, Nick Mazing, Sentieo's director of research, said.The movement, which started in 2017, has brought sexual-misconduct allegations against powerful men such as Matt Lauer, Harvey Weinstein, and Charlie Rose to light. While there have been isolated incidents in the finance industry, the movement has had an influence on workplace culture, including a reluctance to have one-on-one meetings with women and a cutback in corporate holiday parties.Venture-capital firms and investment banks have also pushed to add in a Weinstein clause to contracts to protect investments in companies that are then plagued by sexual-harassment scandals.Read more: D.E. Shaw fired a high-profile hedge-fund manager after an investigation into alleged inappropriate behavior, and now he's fighting backSome firms are more #MeToo-targeted than others. Blackstone and Carlyles risk-factor sections added the language to focus on companies the private-equity firms invest in potentially violating anti-harassment laws but did not mention the firms own employees. JPMorgan added in a line that said the firm could be in trouble if employees engaged in discriminatory behavior or harassmenta catch-all statement that would protect against a variety of scandals.Read more: Hedge funds are watching a key lawsuit involving LinkedIn to see if they can spend billions on web-scraped dataYet other additions are more clearly #MeToo-related. Och-Ziff Capital Management specifically tweaked its language to include a line on employee misconduct and other inappropriate or unlawful behavior that is directed to other employees. Apollo Global Management added a line to its annual report saying sexual harassment by employees, sub-contractors, or consultants could hurt the companys brand and reputation regardless of ultimate outcome because of the headline risk. Moelis states that sexual harassment by employees would hurt not only the firms recruitment of clients but also talent retention because of negative publicity.It is not always possible to deter employee misconduct, and there can be no assurance that the precautions we take to prevent and detect misconduct will be effective in all cases, Moelis most recent annual report reads.The companies named above either declined to comment or did not respond to requests for comment except for Aflac, which said in a statement that "we regularly review our disclosures to reflect the current business environment in a variety of ways. We believe that this is a responsible approach and will continue to pursue it going forward."The disclosures, said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, are an acknowledgement of the business environment right now.Its protection against securities fraud, he said. If something does happen, you dont want investors coming to you and saying why didnt you warn us about this."And don't expect the language to be removed from filings if the movement dies down, said Greg Kramer, a partner at Haynes and Boone who focuses on securities law. The focus on adding #MeToo-related clauses to public filings is reminiscent to him of how companies added language about sleazy accounting practices that resulted in several corporate scandals in the late 1990s and early 2000s."Companies adopted internal accounting controls to prevent these types of accounting practices from happening again, while also listing out in their public filings that this is a risk," Kramer said. "The most important thing here is for companies to have strong policies and procedures around this type of action so they can prevent something like this from happening."Sign up herefor our weekly newsletter Wall Street Insider, a behind-the-scenes look at the stories dominating banking, business, and big deals.Join the conversation about this storyNOW WATCH: Physicists have discovered that rotating black holes might serve as portals for hyperspace travel
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