Appeals Court Rules for Grasso in Compensation Case
The battle over the $187.5 million compensation package for Richard Grasso has ended in a win for the former chairman of the New York Stock Exchange.
A New York appeals court ruled that the state attorney general did not have authority to prosecute two violations of the state’s nonprofit law because they were extinguished when the exchange converted to a for-profit corporation, the New York Law Journal reports. The claims were based on an alleged unlawful transfer of assets and breach of fiduciary duty.
The ruling follows last week’s decision by New York’s highest court, the Court of Appeals, that held the attorney general did not have the power to bring claims against Grasso that were based on common law.
A dissenter argued yesterday’s appeals court decision “would open the door to a feeding frenzy for con men and swindlers to raid assets of not-for-profit corporations they control and then evade prosecution and responsibility by merging with a for-profit corporation.”
The New York Times says the ruling “hands a remarkable victory to Mr. Grasso against his antagonist, former attorney general—now former governor—Eliot Spitzer, who pressed the case against Mr. Grasso.”
New York’s current attorney general, Andrew Cuomo, does not plan to appeal.