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Grasso Refuses To Pay Back $139.5 Million

Former NYSE Chief May Seek More Money, Attorney Says

By Ben White
Washington Post Staff Writer
Friday, February 27, 2004; Page E01

NEW YORK, Feb. 26 -- Former New York Stock Exchange chairman Dick Grasso is refusing to return any of the $139.5 million paid to him last year by the exchange and may seek over $50 million more that he believes he is owed, according to Grasso's attorney.

In a sharply worded letter sent on Thursday to NYSE interim chairman John S. Reed, Grasso's attorney, Brendan V. Sullivan Jr., argued that the former head of the exchange did nothing wrong in accepting the $139.5 million payment, which mainly covered Grasso's eight years as chairman.

Dick Grasso was forced out as NYSE chairman on Sept. 17. He has made no pubic comments on the controversy since then. (Frank Franklin Ii -- AP)

Former NYSE Director Asks Judge to Dismiss Suit (The Washington Post, Jul 23, 2004)
Grasso Sues NYSE, Reed for $50 Million (The Washington Post, Jul 21, 2004)
Grasso Sues NYSE for $50 Million (The Washington Post, Jul 20, 2004)
Full Coverage: Latest news and updates.

"Mr. Grasso has no intention of returning any portion of his compensation to the Exchange," Sullivan wrote. "If the Exchange believes it has a valid claim, it should file it, rather than conducting a campaign through the press and intermediaries in an attempt to pressure Mr. Grasso."

Sullivan, who did not return calls for comment on the letter, was referring to public remarks in recent weeks by Reed and newly installed NYSE chief executive John A. Thain urging Grasso to return a portion of the $139.5 million payment.

Sullivan's letter was in response to a letter written by Reed to Grasso on Feb. 12. In that letter, which has not previously been made public, Reed said the exchange had determined that Grasso's pay was "excessive" and "unreasonable."

"[E]ven granting you the benefit of the assumptions favorable to you, the compensation and benefits you actually received as Chairman were excessive by at least $120 million," Reed wrote "Accordingly, the NYSE hereby demands that you repay the Exchange $120 million."

An NYSE spokesman declined to comment on the letters.

Sullivan, a partner at Williams & Connolly LLP in the District, is considered among the top litigators in the country. His clients have included former National Security Council staff member Oliver North, former secretary of housing and urban development Henry G. Cisneros and the widow of the late Redskins owner Jack Kent Cooke. In his letter, Sullivan called the exchange's treatment of Grasso since he left in September "shameful" and raised the possibility that the former chairman might sue the NYSE.

The NYSE last month forwarded a confidential internal report on Grasso's compensation to the Securities and Exchange Commission and New York Attorney General Eliot L. Spitzer for possible legal action. The SEC and Spitzer have said they are trying determine whether any New York or federal laws or exchange rules were broken in the awarding of Grasso's pay.

Controversy over Grasso's pay erupted in August when the exchange disclosed that it had paid Grasso $139.5 million in deferred compensation. It was the first time the exchange had disclosed the pay of is top executive in its 211-year history.

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