Spitzer, SEC Ponders Action in Grasso Pay Matter

New York Attorney General Eliot Spitzer said Tuesday his office may investigate whether the compensation of former New York Stock Exchange Chairman Richard Grasso was appropriate for the head of a nonprofit organization.

According to the Wall Street Journal, the stock-exchange board opted to refer the Grasso inquiry to both Mr. Spitzer and the Securities and Exchange Commission, and both plan to undertake inquiries. The SEC has already sent subpoenas to individuals for information on the pay process, according to a person familiar with the matter.

At a conference in Miami, Spitzer said he has not yet determined the strategy his office will employ after reading the report on the matter by independent reviewer Dan Webb. Webb was asked to look into the Grasso compensation flap after Grasso resigned in September after the details of his $187.5 million deferred compensation package came to light.

Webb’s report was sent to Spitzer who made his comments after reviewing the report. Spitzer, who is working in conjunction with the Securities and Exchange Commission to look into the matter, said he has met with SEC Chairman William Donaldson and Grasso’s lawyer, but not Grasso himself, the Associated Press reported. Spitzer also plans to meet with some members of the NYSE board. His standing in the case comes from New York’s laws governing nonprofit organizations, while the SEC’s probe is based on securities laws.

There is a "legal question on whether the salary paid to Mr. Grasso is commensurate to the services he rendered to a not-for-profit," Spitzer said.

"We will speak to all of the parties involved in determining what the pay compensation was and what the methodology was for determining that pay," the attorney general said.

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