Former New York Stock Exchange Chairman Richard Grasso may finally be ready to settle the civil lawsuit over his $140 million pay package, CNBC's Charlie Gasparino has learned.
After resisting attempts to settle the suit, Gasso has allowed friends to approach the New York Attorney General's office with a proposal to resolve the case and allow Gasso to keep most of the money, Gasparino said.
Grasso was ousted as Big Board chief in 2003 amid controversy over the hefty pay package.
Under terms of the proposal, Grasso would make a large donation to a charity, and the New York Stock Exchange would donate money Grasso says is still owed to him under his contract to charity as well, Gasparino said.
The proposal is being pushed by a Greenwich, Connecticut, businessman named John Grunow, who says he has Grasso's blessing in the matter, Gasparino said. So far, Grunow has sent the proposal to Vincent Tese, a Bear Stearns board member, and a close associate of the newly elected attorney general, Andrew Cuomo.
Tese, who served as economic development chief under then-New York governor Mario Cuomo, Andrew Cuomo's father, says he referred the matter directly to the Attorney General's office. Grunow told Gasparino he is planning to take the matter up with the AG immediately.
Grasso has flirted with settling the civil lawsuit in the past. But he has then backed off, partiucularly after hearing from his co-defendant in the case, billionaire financier Ken Langone, who once told Grasso he would never speak to him again if he settled before Langone could clear his name, Gasparino said.
But that was before the judge in the case, Charles Ramos, ruled that Grasso must return most of his $140 million pay package. Grasso has appealed the ruling, and a decision could be months away.
If Grasso wins the appeal and there is a trial, it could be costly for Wall Street, Gasparino said. Tha's because Grasso plans to call as witnesses top brokerage firm officials who sat on the NYSE board and approved his massive compensation, including former Goldman Sachs CEO and current Treasury Secretary Hank Paulson
Grunow and some of Grasso's friends are hoping the case doesnt come to that, Gasparino said. In their proposal, they want Grasso and the NYSE to give their money to a fund "that could benefit all of the 9/11 rescue victims and in particular the New York State Police and Firemen who sacrificed their health in the rescue operation," according to a copy of the proposal obtained by CNBC.
Grasso had no immediate comment on the matter, but Grunow told CNBC that he spoke with Grasso on the proposal and Grasso told him he is open to settlement of some kind. The bigger question is whether Cuomo, who took over the case from Eliot Spitzer, the former attorney general and current governor of New York State, is open to deal. A spokesman for Cuomo had no immediate comment.