Perhaps the highest profile Wall Street case brought by then New York Attorney General Eliot Spitzer continues to unravel. The New York Court of Appeals, New York state’s highest court, this morning issued a ruling upholding a lower court decision in Spitzer’s lawsuit over the compensation paid to former New York Stock Exchange CEO Richard Grasso. The lower court ruling had tossed out four of six claims filed against Grasso. This morning’s decision puts those claims to rest permanently.
The ruling will likely make it more difficult to challenge Grasso’s compensation package, reported Charlie Gasparino, who broke the story on CNBC this morning.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
wow, 83-9, Congress knows who butters their bread. In addition to the $300 billion of default risk transferred to the US Government from CFC and BAC books(among others) – here are some interesting provisions of the bill
http://demint.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=bb59c9d8-abbb-655b-09b6-e53d5678930e&Month=6&Year=2008
A.IRS Reporting of Americans’ Electronic Credit Card Transactions: Requires payment companies (credit cards and third party payment systems) to report to the Internal Revenue Service every individual entity (“payee”) they made a payment to and the gross amounts paid to those entities.
B. New Fingerprint Database of Bank Employees, Realtors, and more: Requires anyone involved in originating a mortgage loan, including part-time bank employees and real estate professionals, to submit their fingerprints to the FBI.
Yeah, I caught Gas P breaking the story a full 3 minutes before Bloomberg. Say what you want about him, he does often break a story before most of the other media outlets….
But yeah, I saw this was one coming about 10 minutes after the Spitzer story broke, and my thoughts were reaffirmed about 3 minutes after his press conference.
This is just the beginning though. I wonder if the majority of the defendants in the cases Spitzer brought will be appealing in the very near future…. I’m interested in seeing how this one turns out.
@cauxion – client #9 has had a terrrrrible record at getting convictions against anyone on wall st., and then ran to albany to leave the mess for someone else.
But convictions are hard to get when you’re grandstanding with little to no evidence.
Whats interesting in that? They already have all i-bank employees’ fingerprints. It would be good if they also start to track the sleazy brokers.
Do they already have everyone’s credit card transactions on file at the IRS?
You’re right FUNdamental. The majority of his cases never went to trial.
Another criminal goes free…Amazing!!
I’d wish they focus on how Grasso got such a pay package in the first place. AFAIK Grasso probably did nothing wrong (no fraud, no embezzlement), it’s the system that’s the problem.
what did he do that was criminal? Spitzer sued him because he made too much money.
http://www.portfolio.com/views/blogs/odd-numbers/2008/06/25/who-killed-the-economy
He made too much money by milking the NYSE. There were also false statements involved in his pension and separation agreements.
If its criminal for a Hedge Fund manager to milk investors then it is criminal for Grasso to milk the NYSE.
The justice system is seriously flawed!
The NYSE was owned by Wall Street firms and its board was headed by top Wall Street executives. They ought to be able to figure out how much to pay the CEO without getting “milked”. And if they do overpay, that’s not the government’s business.
Fuck those guys. Grasso rules.
@ 11:45
The Gov’t has this uncanny ability to get itself involved in a veritable cornucopia of things which “aren’t its business”, witness: MLB/steriods, windfall profits/energy companies, etc, etc, etc…
Client 6 wtfpwned again.
I can’t wait to hear the opportunity cost calculation Grasso’s team comes up with. If only personal compensation from Spitzer were a possible outcome.
“If its criminal for a Hedge Fund manager to milk investors then it is criminal for Grasso to milk the NYSE.” No. “Milking investors” probably entails violations of the securities laws. Grasso negotiated his pay package with NYSE. Just because it might be excessive doesn’t mean it is illegal. You’ve got to have a law that says it’s illegal. We don’t prosecute people on the basis of an analogy.
It’s rediculous to assume the ceo of the nyse shouldn’t be well compensated. That position was (at the time) one of the most important positions in the global equity marketplace. His ability to stave off reg nms (which ultimately proved to be the undoing of the nyse) and keep everyone on wall st. (See 80% marketshare under grasso) continuing to do their trading there despite the availability of arca, liquidnet, harborside etc etc…for crossing and dark networks, I’d say that deserves the congressional medal of honor if you wanted to see the nyse prosper.
Their technology was bad, and didn’t have a contingency plan if the nyse got forced into a computer battle, that was short sighted and a terrible miss. But that disaster didn’t happen under his watch, and wasn’t at issue when he was compensated.
I believe the most important positions should be highly compensated to attract the best people…this is part of the reason we have crappy congressman and presidents that most people feel are choosing between the lesser of two evils. And at the time of this package, the nyse was a pillar of our free market economy.
Dick Grasso is a bufoon!
@ 12:24
Thanks for the value-added comment bro.
@ 12:04
You bring up a good point, the proper analogy is to hedge fund managers who negotiate “above-market” fees (5-and-45 like SAC, etc), not to “HF” managers like Sammy Israel.
If you’re gonna use an analogy as precedent (a dubious legal strategy, at best), might as well use the correct one.
@12:31
“BRO” you must be one of the Bear crew!
to guest at 12:24pm……yeah, but a very wealthy buffoon.