NYSE Chief Failed to Disclose Stock Pay

New York Stock Exchange Chairman Richard Grasso failed to meet financial disclosure requirements over the last five years relating to his position as a director of Computer Associates International Inc.

Grasso and four other Computer Associates directors, including former New York Republican Sen. Alfonse D’Amato, didn’t include information on stock compensation in year-end reports required by the Securities and Exchange Commission.

Computer Associates said the directors relied on the company’s mistaken legal advice.

Grasso filed a catch-up report this month, disclosing stock awards dating back to August 1996. In Computer Associates’ proxy filing to shareholders, the Islandia, N.Y., software maker also cited Grasso and the other directors as delinquent filers.

“No insider ever wants to see his name in a proxy statement listed as someone who didn’t comply with the law,” said attorney Peter Romeo of Hogan & Hartson. A spokesman for Grasso, who is stepping down from the Computer Associates board this year, declined to comment. The NYSE sets corporate governance rules for its 2,800 listed companies.

Attached to Grasso’s late filing was a letter from Computer Associates’ general counsel saying the company had reversed legal advice and concluded that a deferred stock plan for directors required reporting to the SEC.

Timeliness of insider filings became an issue when President Bush called for prompt disclosure of insider trades to improve corporate accountability. Bush then came under criticism himself for reporting his 1990 sale of stock at Harken Energy Corp. more than eight months late. The SEC rarely takes action against late filers.