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A New York trial court judge ruled last week that New York Attorney General Eliot Spitzer has the authority to challenge the allegedly unreasonable compensation of former New York Stock Exchange Chairman Richard A. Grasso on behalf of an investing public that would otherwise lack standing to sue over the claimed lack of oversight at the exchange. Spitzer has charged that Grasso and his ally on the exchange’s compensation committee, Kenneth G. Langone, put together an almost $200 million pay package for Grasso in violation of the state’s nonprofit law, which requires that executive compensation be reasonable. Grasso in turn argued that Spitzer had no standing under nonprofit laws to police the exchange, which he likened more to a for-profit corporation in that it was controlled at the time by its 1,366 seatholders. Manhattan Supreme Court Justice Charles Ramos said the most significant difference between the exchange and other nonprofits was not its governance by seatholders but its regulatory authority over a securities market relied upon by millions of investors in New York alone. Spitzer v. Grasso, No. 401620/04.

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