Grasso Refuses to Return $139.5 Million

[LiviaOlivia]

Former NYSE Chief May Seek More Money, Attorney Says

By Ben White
Washington Post Staff Writer
Friday, February 27, 2004


NEW YORK, Feb. 26 -- Former New York Stock Exchange chairman Dick Grasso is refusing to return any of the $139.5 million paid to him last year by the exchange and may seek over $50 million more that he believes he is owed, according to Grasso's attorney.

In a sharply worded letter sent on Thursday to NYSE interim chairman John S. Reed, Grasso's attorney, Brendan V. Sullivan Jr., argued that the former head of the exchange did nothing wrong in accepting the $139.5 million payment, which mainly covered Grasso's eight years as chairman. "Mr. Grasso has no intention of returning any portion of his compensation to the Exchange," Sullivan wrote. "If the Exchange believes it has a valid claim, it should file it, rather than conducting a campaign through the press and intermediaries in an attempt to pressure Mr. Grasso."

<snip>

Legal experts and regulatory sources have said that Spitzer may be in the strongest position to make a case that the payment to Grasso violated laws governing New York not-for-profit groups such as the exchange. New York not-for-profits are required to reinvest profits and not distribute them to employees. Spitzer could argue that Grasso's payments were a distribution of profits.

<snip>

In the letter, Sullivan also threatens to countersue the exchange "for the more than $50 million that it still owes" Grasso. This apparently referred to a $48 million payment owed to Grasso under his contract that he declined to take last year. Grasso may also be due several more million dollars under his contract if he argues that he was fired by the exchange and did not resign. Sullivan also appeared to threaten another lawsuit if Reed and Thain continue to make negative public comments about Grasso. "The Exchange signed a contract that prohibits the public disparagement of Mr. Grasso. We suggest that it is time for you and Mr. Thain to read the contract, as we intend to hold you to it."

http://www.washingtonpost.com/ac2/wp-dyn/A10599-2004Feb26

[TacticalPeek]

1. Surprise!

This just in: the sun is expected to (appear to) rise tomorrow morning, early.

[maggrwaggr]

2. 139.5 mil buys a lot of lawyer-time

I don't think he'll be paying that back any time soon.

He could have lawyers working the rest of his life and still come out ahead.

[Buns_of_Fire]

3. Casinos give you a better deal than the NYSE

At least they give you free drinks while you're gambling yourself into bankruptcy. I hope Spitzer persues this -- if anyone will go after Grasso and his cronies, he will.

[Racenut20]

4. Why aren't we kicking out the Board of Dir who paid it to him???

[Buns_of_Fire]

5. "One hand washes the other"

The NYSE's public purpose is to protect investors, but it is owned and operated by a profession (broker-dealers) that has a collective interest in profiting from investors.

The NYSE's "ultimate constituency" {the investing public} has no voice -- it does not pick directors, does not pay dues, does not have director slots reserved for it to select, and, according to CII {the Council of Institutional Investors}, is virtually never consulted.

From "Background on NYSE Structure and Governance". (Note: This is a PDF file. The HTML equivalent can be found HERE.)

Something about foxes guarding henhouses comes to mind here... :shrug:

[mobuto]

6. They have.

And Bruce McCall, for one, is in deep excrement.