Friday, October 20, 2006

Judge tarnishes Grasso

Grasso must repay NYSE $100 mln after ruling-Spitzer
In a setback for the former Big Board boss, New York Supreme Court Judge Charles Ramos said in a 72-page written ruling that Grasso must repay certain payments and interest he received during his tenure at the NYSE.

Darren Dopp, a spokesman for New York Attorney General Eliot Spitzer, said the decision meant Grasso must return about $100 million paid to him by the NYSE.

Dopp said that in addition to returning more than $80 million in pension funds, Grasso must return tens of millions of dollars that were advanced to him as part of his lump sum payment in 2003. Grasso also must repay interest on $36 million in improper interest free loans he illegally took from the NYSE, Dopp said.

Judge Ramos denied Grasso's bid to seek damages from the NYSE over losing his job in 2003, concluding that Grasso had resigned. The judge said that Grasso could have forced the exchange to fire him. "Instead, for reasons best known to him, Mr. Grasso agreed to resign," Ramos said.

The judge also rejected Grasso's claims of defamation by the Big Board and former NYSE chairman John Reed and denied bids to dismiss certain claims made by Spitzer.

The ruling also said that Grasso had breached his fiduciary duties by failing to disclose to the NYSE compensation committee the amounts he was due under certain plans.

"That a fiduciary of any institution, profit or not-for-profit, could honestly admit that he was unaware of a liability of over $100 million, or even over $36 million, is a clear violation of the duty of care," Ramos wrote.

Grasso, who has consistently denied any wrongdoing, sought $48 million in compensation, plus interest, that he said was still due him.

For a bit of background see the following Washington Post article:
Pay Raised Eyebrows Early On


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