October 21, 2006
Grasso Loses Again
The state court judge has, in preliminary motions, held that Grasso owes the NYSE close to $100 million in compensation that he should not have had. Grasso is livid and will appeal. Grasso may be the victim of too much lawyering. He has very fine lawyers and is sparing no expense in his defense. His lawyers, who file whatever has a chance, have induced substantial complexity into the litigation. The action consists of five cases and a flurry of motions and countermotions. The Wall Street Journal got involved in its campaign against Spitzer. But the motions and the internal self-convincing that goes with such a defense (we will win) sometimes obscure the basic issue: Did Grasso tell the board about his compensation package? Grasso wins or loses on his credibility on this straightforward question. This was always a risk and why Grasso should have investigated settlement; the fancy lawyering may have led to a false sense of confidence. In any event, Judge Ramos cut to the basic issue and said no. Sometimes lawyers can be too clever and too good.
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