[JURIST] Leading Wednesday's corporations and securities law news, Newsweek is reporting that the New York Stock Exchange may settle with former CEO Richard Grasso [Wikipedia profile] for $25 million. The NYSE is attempting to recoup some of the $187 million compensation package Grasso received from the NYSE when he left the exchange in 2003. In addition to his litigation with the NYSE [JURIST news archive], Grasso has been sued by the state of New York [JURIST report] over the highly controversial compensation package, in which critics say he played too large of a role in setting. Reuters has more.
In other corporations and securities law news...
- The first of over four thousand Vioxx-related lawsuits [JURIST report] went to the jury today. Drug maker Merck [corporate website] is defending itself against a wrongful death suit from a woman in Texas whose husband died of arrhythmia after taking Vioxx. Merck discontinued the once-popular arthritis medication [Merck press release] after determining it increased patients' risk for heart attacks. The plaintiff's lawyer said in closing testimony Wednesday that Merck hid Vioxx heart dangers for ten years. Merck's attorneys and witnesses argue that the man did not die from a heart attack and his condition was not connected to his use of the drug. Merck has established a reserve of $675 million to pay its legal costs in the upcoming barrage of lawsuits. Reuters has more.
- The former CEO of Thomson Kernaghan & Co, Lee Simpson, was banned from securities trading Wednesday. The Ontario Securities Commission (OSC) gave Simpson a lifetime ban from the securities industry for failing to supervise his former employees. Simpson has also agreed to never reapply for membership in the Investment Dealers Association of Canada (IDA) [official website]. Thomson Kernaghan employees, including former chairman Mark Valentine, bought shares of Chell Group for $1 each and sold them to clients for $2 each. The fraud was closely followed by Thomson Kernaghan's collapse in 2002 [IDA bulletin, PDF]. According to an OSC press release [text], Simpson was also ordered to pay the commission C$50,000 to cover the expense of the investigation. Bloomberg has more.
- The former AOL [corporate website] employee who sold 92 million names to spammers was sentenced to fifteen months in federal prison Wednesday. Jason Smathers, who received $28,000 for the list of names, was also ordered to pay AOL $80,000 in restitution. AOL had been seeking at least $300,000 but the judge called that number speculative. Smathers pleaded guilty earlier this year [AP report] in hopes of cooperating but the judge said he did not have helpful information for the government. AP has more.