New York (July 21, 2004) – After months as the subject of a lawsuit regarding his enormous pay package, former New York Stock Exchange chair Richard Grasso has launched a lawsuit of his own against the exchange, for breach of contract and defamation of character.
The suit, filed Tuesday, seeks $50 million from the NYSE, partly in compensation for salary not paid him from his controversial pay package, and partly for disparaging comments made about Grasso by exchange executives, including current chair John Reed. According to reports, Grasso’s spokesman accused the NYSE of, among other things, “maliciously disparaging [Grasso] through Mr. Reed’s false and defamatory statements.”
Grasso has claimed that he will donate any damages received from the suit to charity.
Grasso’s original pay package was valued at approximately $190 million, though in the end he received around $140 million. In May, New York Attorney General Eliot Spitzer launched a lawsuit seeking to recover approximately $100 million of that, under a state law that requires the pay of executives of nonprofit organizations like the NYSE to be “reasonable” and “commensurate with services performed.”
Grasso also hopes to have Spitzer’s lawsuit dismissed – or moved to a federal court. His lawyers have requested such a move, based on the fact that the NYSE is a federally regulated entity. On Monday, however, Spitzer filed a motion arguing that the case should stay in a state court, since the NYSE is governed by New York State’s nonprofit laws.
-- WebCPA staff
