Legal News

Grasso is Greener: Court Tosses Actions Against Former NYSE Head

By Ashby Jones

The legal news is coming in fast and furious today. The latest: A New York appeals court has tossed out a summary judgment decision that ex-New York Stock Exchange Chairman Richard Grasso must return a portion of his $187.5 million compensation package. Here’s a report from Dow Jones Newswires, and one from Bloomberg.

In a 3-1 decision, the New York Supreme Court’s Appellate Division also dismissed the two remaining causes of actions against Grasso and one against former NYSE director Ken Langone, saying New York Attorney General Andrew Cuomo can no longer pursue the claims under the state’s not-for-profit law since the NYSE has become a for-profit company, NYSE Euronext Inc.

The “Supreme Court erred in concluding that the attorney general’s authority to maintain these causes of action against Messrs. Grasso and Langone was unaffected by the conversion of the exchange into a for-profit entity,” Appellate Division Justice James M. McGuire wrote for the majority.

The intermediate appeals court decision is the second major setback in a week for the state attorney general’s office as it attempts to force Grasso to return more than $112 million.

Last week the New York Court of Appeals, the state’s highest court, upheld an appellate division decision that the attorney general’s office couldn’t pursue four of six causes of action against Grasso. The remaining two were dismissed today.

“Unless it’s reversed on appeal, Grasso has won this particular lawsuit, because there’s nothing left,” said Bryan Cave lawyer Richard Schulman to Bloomberg. Schulman isn’t involved in the case.

The case was brought by former New York Attorney General Eliot Spitzer in 2004, alleging Grasso’s pay was excessive for a not-for-profit company. Grasso, who left the NYSE in 2003 amid turmoil over his pay, has denied wrongdoing.

Full post as published by Law Blog - WSJ.com on July 01, 2008 (boomark / email).