New York court dismisses case against former stock exchange head

Grassos total compensation was worth $187.5 million, awarded by a board of directors handpicked by Grasso himself from amongst companies over which he had nominal regulatory authority. Overriding a 2006 order by a lower court to return part of his $112 million retirement pay, the appeals court ruled that Grasso was entitled to keep every penny of this sum.

The court also threw out related charges against Kenneth Langone, the chairman of the NYSEs Compensation Committee and a member of the board in 2003. The state Attorney Generals office indicated that it would not pursue the charges any further.

Concerned by public outrage and criticism by investors and regulators, the board forced Grasso to resign from his position just 20 days after his pay was made public. In May 2004, the Attorney Generals office, then led by Eliot Spitzer, filed six charges against Grasso for excessive pay. State law requires that executives of not-for-profit entities be paid reasonable amounts.

In 2006, the NYSE merged with Archipelago Holdings, an electronic securities trading exchange, to become the explicitly for-profit NYSE Group. The following year, four of the charges were dismissed by the state appeals court, which ruled that the attorney general did not have authority to bring the charges against the Exchange. In both the 2007 decision and the July 1 ruling, the same judge, James McGuire, authored the majority opinion.

Read More