NY Top Court Backs Dropped Claims in Grasso Pay Case
The New York Court of Appeals, the state's highest court, upheld Wednesday a lower court decision that had tossed out four of six claims in a lawsuit challenging the compensation paid to former New York Stock Exchange Chairman Richard Grasso.
The decision deals yet another blow to the legacy of former Attorney General Eliot Spitzer, and is expected to make it more difficult to try to take back more than $100 million of pay awarded to Grasso. (For more analysis of the decision, see video to the left.)
Grasso left the exchange in 2003 after an uproar over his $187.5 million compensation package. He was then sued in 2004 by Spitzer's office, which said the pay was exorbitant for an organization classified as a not-for-profit group.
However, Grasso argued that a private interest like NYSE should be free to set its own compensation.
The New York Court of Appeals said state law did not give the attorney general's office the ability to pursue the claims against Grasso, "however unreasonable that compensation may seem on its face."
In the decision affirming a lower court's ruling, Chief Judge Judith Kaye said state law required more evidence to void such a payment.
The decision does not end the case, but the state's attorney general's office will now need to prove that not only was Grasso's pay unreasonable, but that Grasso knew it was the case and tried to concel his pay details from the exchange's board.
--Associated Press and Reuters contributed to this report.