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Mary Altaffer/AP
Former NYSE Chairman Richard Grasso

New York Drops Case Against Grasso

July 03, 2008 10:13 AM
by Denis Cummings
Former NYSE Chairman Richard Grasso will keep his $187.5 million compensation package after an appeals court dropped all remaining charges against him.

30-Second Summary

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Last Wednesday, an appeals court affirmed a lower court ruling that dismissed four of the six counts brought against former New York Stock Exchange Chairman Richard Grasso. On Tuesday, the Appellate Division of State Supreme Court dismissed the remaining two counts.

The case dates back to August 2003, when it was revealed that Grasso had been awarded a $139.5 million compensation package. The deal was heavily criticized in the media and soon the U.S. Securities and Exchange Commission asked Grasso to step down.

In May 2004, N.Y. Atty. Gen. Eliot Spitzer sued Grasso for the $139.5 million, plus $48 million in deferred compensation he was set to receive. Spitzer claimed that the pay was too much for the head of a not-for-profit organization.

Spitzer was celebrated by many for taking aim at greedy corporate culture, which was especially loathed at the time following accounting scandals at Texas energy company Enron.

In October 2006, N.Y. State Supreme Court Justice Charles Ramos ordered Grasso to return as much as $100 million, ruling that Grasso had withheld information about his compensation package from NYSE’s compensation committee.

Grasso’s legal fortunes began to change in May 2007, when an appeals court dismissed four of the six charges against him. The latest court decisions affirmed that ruling and dropped the remaining charges.

Headline Links: Grasso win court cases, Cuomo drops case

Background: People v. Grasso

Key Players: Grasso and Spitzer

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