NYSE Board to Consider Suit Against Grasso

The newly revamped New York Stock Exchange board of directors will deliberate next month on whether to sue ousted former Chairman Richard Grasso, NYSE interim Chairman John Reed said.

Reed, in an interview with the New York Times published Sunday, said the board would review an internal investigative report to help determine whether Grasso or other former directors violated their duties as board members during the process that led to the approval of employment contracts that resulted in a $139.5-million payout to Grasso this year.

If so, the board could decide to file a lawsuit to recover some of the money, Reed said in the interview.

The report, produced by former federal prosecutor Dan Webb, will be sent to the directors this week and discussed at their next board meeting Jan. 8, an NYSE spokesman said Monday. Neither Grasso nor his attorney, Kenneth C. Edgar Jr., could be reached for comment.

The Securities and Exchange Commission last week approved changes to the Big Board’s constitution, including a restructured board whose members are free of business ties to the NYSE.

The board’s first action, announced last week, was to hire Goldman Sachs Group President John A. Thain to serve as the New York Stock Exchange’s chief executive.

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Thomas S. Mulligan