New York Attorney General Eliot Spitzer yesterday sued former New York Stock Exchange Chief Executive Richard Grasso to try to recoup nearly $100 million of the $188.5 million the exchange paid him before he resigned last September.
At a Manhattan press conference, Spitzer called Grasso's compensation process "rigged," and "wholly inappropriate and illegal." He said that Grasso, who was also the NYSE chairman, at turns misled and intimidated some of the exchange's board members, Reuters reported.
Kenneth Langone, former chairman of the NYSE compensation committee, who participated in approving the pay package, and the exchange itself were named as defendants.
Frank Ashen, a former NYSE executive vice president who was seen as a key architect of Grasso's compensation package, reached a settlement with Spitzer's office, under which he will return $1.3 million to the NYSE, Spitzer said and Reuters reported. The suit seeks to rescind the pay package and to settle on an appropriate compensation level for Grasso.
The suit caps a four-month investigation by Spitzer who said Grasso's case epitomizes all that is wrong with corporate America.
"When this case comes to trial, we will seek well over $100 million back from Mr. Grasso," Spitzer said. "The amount that was paid was simply not reasonable."
Grasso has already received $140 million from the exchange. Spitzer also said Grasso had received a previously undisclosed $12 million, Reuters reported.