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Richard Grasso and the NYSE

Richard Grasso was born in New York City in 1946 and was chairman of the New York Stock Exchange for 8 years from 1995 until 2003. His career on Wall Street began in 1968 when he began working as a clerk. Grasso was also president of the exchange during the September 11, 2001 terrorist attacks on the World Trade Center and his leadership was considered to be a major factor in getting the exchange up and working so quickly after the attacks.

Grasso grew up in the city and was raised by his mother. He joined the Army after attending university for two years, and it was upon his exit from the Army that he began working as a floor clerk on Wall Street. The rest, as they say, is history. Grasso worked hard and moved up, through the ranks, and by 1995, he was president. Although his tenure with the NYSE would end in controversy, he was thought to be a major force in keeping the stock exchange one of the top financial markets in the world.

Four years into his reign atop the NYSE, a controversy began when Grasso invited a group of members from the Revolutionary Armed Forces of Columbia (FARC) to the floor of the stock exchange. It is still unknown why Grasso would associate himself with an organization that the United States government considers to be a terrorist group that uses illegal drug sales to fund their war against the Columbia government. During the meeting, Grasso is reported to have said that he was bringing a message of cooperation from United States financial companies, since FARC has been known to preach anti-capitalism ideals. A scene like this today in the post-9/11 world is unfathomable.

Grasso’s downfall was precipitated by his receipt of what is known as a deferred compensation pay package. The reason why this was a problem was because the package was worth 140 million dollars, and the people who agreed to give it to him, the compensation committee, had been hand picked by Grasso and the members were made up of representatives of companies that traded on the New York Stock Exchange. An obvious conflict of interest led to Grasso stepping down as the chair of the exchange on September 17, 2003.

The story of Richard Grasso isn’t over as a lawsuit is still pending to attempt to recover some of the $140 million, as well as a counter lawsuit filed by Gasso.

  © Mirza Rais 2008

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