NEW YORK – The New York Stock Exchange (search) has moved to dismiss a $50 million countersuit filed by former chief Richard A. Grasso (search), claiming that the U.S. District Court in which Grasso sued does not have jurisdiction in the case.
The filing, made late Monday, does not address whether Grasso's countersuit has merit, instead focusing on the fact that Grasso moved the case to federal court in June. The exchange's lawyers instead bolstered New York Attorney General Eliot Spitzer's (search) claim that the case should be returned to state court.
Spitzer sued Grasso and former NYSE board member Kenneth G. Langone (search) 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 $187.5 million pay package. Grasso resigned as chairman and chief executive of the NYSE in September, one month after the pay package was approved.
While the exchange was named as a defendant in Spitzer's case, the attorney general said he would not seek damages from the NYSE and said any money received would go back to the exchange. NYSE lawyers have been working closely with Spitzer's office on the case, and have shared confidential documents related to the pay package.
On July 20, Grasso filed a countersuit in U.S. District Court in Manhattan, seeking damages against the NYSE for breach of contract and against current exchange Chairman John Reed for defamation. Grasso claimed Reed made disparaging comments against Grasso and his stewardship of the exchange, which violated a "nondisparagement" clause in his contract and maligned his character. Grasso said he would donate any damages received to charity.
Grasso spokesman Eric Starkman had no comment on the NYSE's filing late Monday. Lawyers for the exchange also had no comment.