NY appeals court dismisses charges against stock exchange CEO

[JURIST] A divison of the New York State Supreme Court dismissed [decision] remaining charges against former New York Stock Exchange (NYSE) [official website] CEO Richard Grasso [BBC profile; JURIST news archive] on Tuesday. Former NY Attorney General Eliot Spitzer had brought six charges against Grasso over his controversial $187.5 million compensation package from NYSE. Four of the charges were dismissed [JURIST report] in May 2007. The two remaining charges against Grasso involved violations of state law regarding not-for-profit corporations. In the dismissing the charges against Grasso, Associate Justice James McGuire wrote:

Here, the Attorney General is using public funds out of appropriations to his office to prosecute causes of action on behalf of an entity that is no longer a not-for-profit corporation and seeks only a money judgment that would benefit the owners of the for-profit entity into which the not-for-profit has been converted (even if the judgment nominally would be paid to the not-for-profit corporation). The Attorney General's continued prosecution of these causes of action ... vindicates no public purpose.
NY Attorney General Andrew Cuomo [official profile] announced that the AG's office will not appeal Tuesday's decision [Washington Post report] to dismiss the remaining charges. The New York Times has more.

Grasso was forced out of his position as CEO of the NYSE after public outcry over his compensation package. Spitzer and the state of New York had argued in the complaint against Grasso [text, PDF] that the amount of the compensation package was unreasonably high and violated state non-profit law. Grasso fought the charges in court, contending that NYSE directors were aware of his pay, and had approved it. In October 2006, a NY court ordered [JURIST report] Grasso to pay back a major portion of the compensation he earned as CEO between 1995 and 2003.


 

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