Grasso Admits Error on Weill

Richard Grasso, chairman of the New York Stock Exchange, accepted some fault Monday in the controversy that erupted over the nomination of Citigroup Inc. Chairman Sanford I. Weill to represent public investors’ interests on the NYSE board.

If the NYSE’s nominating committee had better anticipated the reaction to the choice, “the nomination would not have been made,” Grasso said. “I will take ... my share of the ownership of that.”

Weill withdrew his name last month after New York Atty. Gen. Eliot Spitzer called Weill’s nomination “an outrage.” Spitzer spearheaded last year’s investigation of Wall Street analysts’ conflicts of interest that led Citigroup, the world’s biggest financial-services company, to agree to pay $400 million to settle regulatory charges.

In remarks to state securities regulators in Washington, Grasso said there was no tension between himself and Spitzer over the Weill nomination.

Grasso also told the state regulators that the securities industry has made progress in restoring investor confidence after accounting scandals at Enron Corp., WorldCom Inc. and other companies.

“I am very confident that we are in the late days of closing out a very dark chapter in the history of finance,” he said. Still, Grasso said securities regulators must “act with speed and with a viciousness” when they discover fraud or other corporate wrongdoing.

“We need to send a very powerful message to the community of finance to the Wall Street community that anyone who approaches the line, not crosses but approaches the line, is unsuitable to be in this business,” the NYSE chief said at a conference of the North American Securities Administrators Assn.

After Weill withdrew his name from consideration for the NYSE investor-advocate post, the NYSE nominated William McDonough, president of the Federal Reserve Bank of New York.