updated 9/29/2004 7:58:33 PM ET 2004-09-29T23:58:33

Richard A. Grasso filed court papers Wednesday bolstering his bid to keep most of the millions in compensation he was awarded as chief of the New York Stock Exchange.

Replying to a brief filed by New York Attorney General Eliot Spitzer, Grasso urged the U.S. District Court to dismiss part of the case against him on the grounds that it lacks merit and was filed under the wrong part of the state's not-for-profit corporations law.

The memorandum challenges one count of the state's six-count case against Grasso, which argues that he should return a significant portion of the $187.5 million compensation package that led to his resignation last year.

Spitzer had challenged Grasso's compensation under the state's not-for-profit corporations statute, saying millions had been loaned to the former NYSE chief in violation of the law. But in the papers filed Wednesday, Grasso's attorneys maintained that under employment contracts he signed with the NYSE, "the challenged payments were not loans. ... There were no loans, period."

Further, Grasso's attorneys argue, the NYSE is actually a board of trade, governed by a different portion of the statute, meaning that even if the payments had been loans, they would have been legal.

The memo focuses on two payments Grasso was awarded under different employment contracts, a $6.5 million lump sum in 1995, and a $29 million payment in 1999.

Grasso maintains this was money he would have earned anyway, and that he never would have had to repay, under any circumstances. Because no repayment was possible, his attorneys argue the payments should not be characterized as loans.

Spitzer sued Grasso and former NYSE board member Kenneth G. Langone on May 24 in state court, seeking more than $100 million from Grasso and $18 million from Langone. Spitzer claimed the two hid information from the board's compensation committee in approving Grasso's pay package. Grasso resigned as chairman and chief executive of the NYSE in September 2004, one month after the pay package was approved.

The exchange itself was also named as a defendant in Spitzer's case, but the attorney general said he would not seek damages from it, and offered assurances that any money he did win back would be returned to the exchange. NYSE lawyers are working closely with Spitzer's office on the case.

Grasso also countersued the NYSE in July, seeking damages for breach of contract and defamation. He said he plans to donate any damages he receives to charity.

An official with Spitzer's office declined comment. Calls to the NYSE and Grasso spokesman Eric Starkman were not immediately returned.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com