Grasso Wants Federal Court

Lawyers for former New York Stock Exchange chief Richard Grasso have filed to move the lawsuit over his compensation brought by state Atty. Gen. Eliot Spitzer from state to federal court.

The filing automatically removes the case from state court, though a spokesman for Spitzer said the attorney general would contest the removal in federal court by early next week.

In the court filing, Grasso argued that his actions as chief executive and chairman of the NYSE, including those alleged in Spitzer’s lawsuit, were done under the oversight of a federal agency -- in this case, the Securities and Exchange Commission.

Marc Violette, a Spitzer spokesman, said his office would file papers in the next few days to have the case sent back to state court.

David Robbins, a former New York state prosecutor now at Kaufmann Feiner Yamin Gildin & Robbins in New York, said a federal judge would side with Spitzer “in a heartbeat.”

“The attorney general will come in and point out that the federal court is a lovely court but not the proper venue” for the Grasso case, Robbins said. “Nice try, guys,” Robbins said of Grasso’s lawyers.

Spitzer is seeking the return of the bulk of Grasso’s $187.5-million compensation package, awarded in August, claiming that the former NYSE head misled the board of directors about his pay and bullied them into approving his compensation. Revelations about the lawsuit prompted Grasso’s resignation as chairman and CEO of the NYSE in September.