Richard Grasso's Rise and Fall at the NYSE

Richard Grasso's Rise at the NYSE was nothing short of meteoric. He was appointed as the CEO of the New York Stock Exchange (NYSE) in 1995, at the age of 45.

Grasso's tenure at the NYSE was marked by significant changes, including the introduction of electronic trading systems. He played a key role in the development of the NYSE's Archipelago Exchange, which was later acquired by the exchange.

Grasso's leadership led to increased profits for the NYSE, with his compensation package reaching $139.5 million in 2003.

The NYSE was a significant part of Richard Grasso's career. He became a clerk at the New York Stock Exchange two weeks after leaving the Army in 1968.

Grasso moved up the ranks quickly, becoming president and then CEO in the early 1990s. He was credited with cementing the NYSE's position as the preeminent U.S. stock market.

As CEO, Grasso was an advisory board member for Yale School of Management.

Richard Grasso's compensation controversy began in 2003 when it was revealed that he had been given a deferred compensation pay package worth almost $140 million. This led to immediate criticism from U.S. Securities and Exchange Commission chairman William H. Donaldson and several pension fund heads.

The NYSE board asked Grasso to leave in a 13–7 vote, and he stepped down on September 17, 2003. Several senior officials followed in the same month. Law firm Winston & Strawn carried out an investigation, and a comprehensive report analyzing Grasso's alleged excessive compensation and benefits was completed in December.

The controversy led to a lawsuit against Grasso by New York State Attorney General Eliot Spitzer, demanding repayment of the majority of the $140 million pay package. Grasso responded with a counter-suit against the Exchange and its chairman John Reed.

Grasso's counterclaim sought restitution of unpaid portions of his retirement package and accused certain individuals at the Exchange of "besmirching his name." He even placed a 1,500-word op-ed article in the Wall Street Journal detailing his grievances against Spitzer.

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A summary decision was issued by the New York State Supreme Court, ordering Grasso to repay a significant amount of excess compensation, with the amount in the tens of millions of dollars. Grasso's counterclaim of defamation was dismissed.

Here are the key dates in the lawsuit:

Grasso invoked his Fifth Amendment right against self-incrimination during an SEC investigation, refusing to answer questions regarding his conduct during an NYSE investigation into possibly improper activities by Exchange specialist firms.

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Richard Grasso's time as the head of the New York Stock Exchange was marked by controversy. He was sued by New York State Attorney General Eliot Spitzer in 2004, demanding repayment of the majority of his $140 million pay package.

Grasso responded with a counter-suit against the Exchange and its chairman John Reed, seeking restitution of unpaid portions of his retirement package and accusing certain individuals at the Exchange of "besmirching his name". He also wrote a 1,500-word op-ed article in the Wall Street Journal detailing his grievances against Spitzer.

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The lawsuit continued to move toward trial in 2006, with neither side showing any interest in settling. In fact, the case dragged on for several years, with Grasso eventually appealing a summary decision ordering him to repay a significant amount of excess compensation.

The New York State Supreme Court issued a summary decision in 2006, ordering Grasso to repay tens of millions of dollars in excess compensation. Judge Ramos wrote that Grasso's failure to disclose the true extent of his total compensation prevented the compensation committee from exercising its fiduciary duties.

Grasso's counterclaim of defamation was dismissed, and he ultimately lost his case. The New York State Court of Appeals dismissed all claims against Grasso in 2008, ruling that the State of New York had no oversight over the NYSE's affairs and that prosecution was "not in the public interest".

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Richard Grasso's tenure as Chairman and CEO of the New York Stock Exchange (NYSE) was marked by controversy and criticism. He was appointed to the position in 1995.

Grasso was a long-time employee of the NYSE, having started as a clerk in 1968. He rose through the ranks, becoming a senior executive in 1987.

During his tenure, Grasso oversaw a period of significant growth and modernization for the NYSE. He implemented new trading systems and expanded the exchange's reach into new markets.

Grasso's compensation package was a major point of contention. He received a $139.5 million bonus in 2003, which was widely criticized as excessive.