Lawyers for former New York Stock Exchange chief Richard Grasso have filed a petition to move the lawsuit over his compensation brought by state Attorney General Eliot Spitzer from state to federal court, a Grasso spokesman said Thursday.
Grasso spokesman Eric Starkman said the petition was filed early Thursday. The two sides are to meet Friday with State Supreme Court Judge Charles Ramos for a preliminary hearing.
Starkman noted that the request for a move to federal court was a “technical legal matter” and did not constitute Grasso’s official response to Spitzer’s lawsuit, filed May 24. Grasso has 30 days from the date of Spitzer’s suit to file a response.
A source who has seen the filing, speaking on condition of anonymity, told The Associated Press the shift to federal court was sought because of jurisdictional matters, since the exchange is regulated primarily by the U.S. Securities and Exchange Commission, not the state of New York.
Spitzer spokesman Marc Violette said the attorney general would contest the petition.
“This case is based on violations of state law and should be adjudicated by a state judge in state court,” Violette said. “This action by Mr. Grasso’s legal team is a distraction from the issue of unreasonable pay in violation of state not-for-profit corporation law.”
Spitzer is seeking the return of the bulk of Grasso’s $187.5 million compensation package, awarded in August 2003, claiming that the former NYSE head misled the board of directors about his pay and bullied them into approving his compensation.
Revelations about the lawsuit prompted Grasso’s resignation as chairman and chief executive of the NYSE in September. Former exchange board member Kenneth Langone, who headed the compensation committee for the board, was also named in the suit, with Spitzer seeking $18 million in damages against him for allegedly misleading fellow board members about Grasso’s pay package.
Both Grasso and Langone have vehemently denied any wrongdoing and have promised to fight Spitzer’s suit in court.