Kenneth G. Langone has played many different roles in his 68 years. Co-founder of hardware chain Home Depot Inc. Prominent Republican fundraiser and philanthropist. Board member of the New York Stock Exchange. Loyal friend.

It's those last two that turned the investment banker into the target of a lawsuit filed yesterday by New York Attorney General Eliot L. Spitzer. Langone, who headed the stock exchange's compensation committee from 1999 to 2003, is accused of breaking state law by engineering a $139.5 million pay deal for his close friend and since-deposed NYSE chairman Dick Grasso.

Langone resigned his board position at the stock exchange last year in the middle of the furor after Grasso's pay package was made public and sold his NYSE seat in March for an undisclosed sum. But he signaled yesterday that he will not shy away from the legal fight ahead. "I am standing up for my convictions and firmly behind those decisions and so if Mr. Spitzer wants to grandstand in the press, he's doing it on a very shaky soapbox," he said in a written statement.

Langone said the pay deal had been properly vetted by outside advisers and other board members. "These were honest, diligent and sound compensation decisions that were thoroughly researched and, most importantly, supported by 100 percent of the board," he said. "We had access to the same information, beginning, middle and end and that's why singling people out in this case is so obviously misguided."

Like Grasso, who had served on the board of Home Depot and its compensation committee, Langone came from a modest background. The son of a plumber and a cafeteria worker who grew up 20 miles east of Manhattan, Langone parlayed his street smarts into an estimated $820 million fortune that ranks 314th on Forbes' 2003 list of the 400 richest Americans. After attending Pennsylvania's Bucknell University and taking night classes in business at New York University, Langone rose to prominence as the investment banker who took Electronic Data Systems Corp. public in 1968.

Ross Perot, EDS's founder and a former presidential candidate, said in an interview yesterday that Langone would not easily back down from a challenge.

"There is no way you'd ever get Ken Langone to do anything that was purposely wrong," Perot said. "I can assure you in all the time I've known him I've never seen him compromise his principles or integrity once. . . . You don't have to run when you don't have anything to hide."

Langone's friends said he has told them he believes that the pay deal was aboveboard and that Grasso's pay was appropriate given the number of new companies he drew to the exchange and the reputation he cultivated for it.

"He's a very, very honest man," said former New York mayor Rudolph W. Giuliani, on whose political transition team Langone served. "If he thinks you did a good job, nobody is going to be more loyal or strong in rewarding you. In Dick Grasso's case, I think he was very impressed with the job Dick did."

Spitzer's lawsuit claims Langone misled his fellow board members about aspects of Grasso's pay package. Langone also allegedly recommended compensation for Grasso that vastly exceeded the benchmarks that outside advisers had set, according to court papers.

"The chair of the compensation committee has to assume responsibility for what the compensation committee does," said William B. Patterson, director of the office of investment at the AFL-CIO, which has pressed for better disclosures and independence at General Electric Co. and Home Depot, two companies on whose boards Langone sits, in the wake of the stock exchange furor.

The Spitzer lawsuit is not the first time Langone has been the subject of regulatory attention. NASD last year charged Invemed Associates LLC, Langone's investment banking firm, with taking large commissions from customers who got preferred chances to buy shares in high-profile initial public offerings during the technology boom. NASD spokeswoman Nancy A. Condon said the case is awaiting a hearing.

Staff researcher Julie Tate contributed to this report.