The New York Stock Exchange and Richard Grasso, its former chairman, could be headed for a legal showdown over the $188 million compensation package that forced Grasso's Sept. 17 resignation from the Big Board.
Interim Chairman John Reed has reportedly told advisers that the pending report of independent investigator Dan Webb may give the exchange the information it needs to force Grasso to pay back between $50 million and $100 million, the Wall Street Journal reported.
Grasso is reportedly pondering legal action of his own to ensure he receives the $57.7 in future pay and severance he claims his contract guaranteed, the Journal reported. Reed has been focused on making sure that payout, which Grasso had agreed to forgo, does not occur.
Now Reed is reportedly ready to lean on the evidence in the harshly critical report prepared by Webb, a former prosecutor, to not only stop that payment, but to try to get back a sizeable portion of the rest.
The Journal reported that a source close to Grasso and his lawyer, Kenneth Edgar, said the two have been preparing for a possible lawsuit that would argue that Grasso's forced resignation on Sept. 17 was the same as being fired, which gives Grasso a good case for getting the money.
Grasso's supporters have argued that his contract ensured he would get the money and that he shouldn't be made to give it up.
NYSE directors will soon receive Webb's report. According to the Journal, it is divided into three parts. One looks at Grasso's compensation and how it was determined. Next, it discusses which individuals and agencies should receive the report. It concludes by examining the legal options available to recoup some of the money promised to or already paid to Grasso.