Court ruling ends pay case against Grasso

NEW YORK -- After fighting a four-year legal battle to keep his $188 million pay package, former New York Stock Exchange chief Richard Grasso triumphed Tuesday when an appeals court threw out the final charges against him. Last week, a different appeals court tossed out four other pay-related charges against him.

In response to Tuesday's appellate ruling, New York Attorney General Andrew Cuomo decided to drop the matter entirely, leaving Grasso the last man standing in one of the most widely watched executive pay battles ever waged in the U.S. legal system.

The case, originally brought by then-attorney general Eliot Spitzer in 2004, had always hinged on whether Grasso's pay violated a state law requiring compensation at not-for-profit enterprises to be "reasonable."

But Tuesday's ruling sidestepped that issue, focusing instead on the 2006 merger between the NYSE and Archipelago which transformed the Big Board into a public company.

Writing for the majority, Judge James McGuire declared that it made no sense to demand repayment from Grasso, since the entity to which the money would be returned was no longer not-for-profit. "The Attorney General's authority to prosecute … lapsed with the merger," McGuire wrote.

Grasso's attorney, Gerson Zweifach, said, "Dick Grasso is gratified by the ruling of the appellate division. His devotion to the stock exchange never wavered and neither did his faith that he would be vindicated by the courts."

Ken Langone, who headed the Exchange's compensation committee and had also been charged in the case, issued a statement of his own: "I have always stood firm for the decisions I made as a director of the NYSE and I am glad this case has been resolved with my name and my integrity vindicated."

Spitzer filed the case in 2004, less than a year after the NYSE's disclosure of the $188 million pay package led to Grasso's resignation. Two years later, a state judge ruled that Grasso's pay was unreasonable. That same year Spitzer was elected governor of New York in a landslide.