Statement By Darren Dopp, Director Of Communications For The New York State

In a comprehensive 73-page decision, New York State Supreme Court Justice Charles E. Ramos today ruled that Richard Grasso must return approximately $100 million already paid to him by the New York Stock Exchange (NYSE).

The Court granted the State's motion for partial summary judgment finding that Mr. Grasso breached his fiduciary duty to the NYSE in accumulating and accepting pension benefits without disclosing the amount of those benefits to the Board of Directors. The Court said: "The question is whether [Grasso's] duty included disclosure of the magnitude of his SERP benefits. It did."

Further, the Court said that Mr. Grasso: "...turns the law of fiduciaries on its head when he maintains that it would have been improper for him" to advise the directors about his pension benefits. The Court directed Mr. Grasso to return the $80 million in pension (SERP) benefits that he received from the NYSE.

With respect to Mr. Grasso's claim that he and other directors were not aware of his SERP (pension) accruals, the Court wrote that it: "...finds this affirmative defense of neglect to be shocking. That a fiduciary of any institution, profit or not-for-profit, could honestly admit that he was unaware of a liability of over $100 million, or even over $36 million, is a clear violation of the duty of care. The fact that it was a liability to an insider (Chairman and CEO) is even more shocking and a clear violation of the duty of loyalty."

In addition to the more than $80 million in pension funds that Grasso must return, the Court found that Mr. Grasso must return substantial additional sums (in the tens of millions of dollars) that were advanced to him as part of his lump sum payment in 2003, and to pay interest on $36 million in improper, interest-free loans that he illegally took from the NYSE. The Court also dismissed Mr. Grasso's claim for additional payments from the NYSE.

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