Daily Archives: August 25, 2006

The real issue in the Grasso case

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Spitzer62.jpgEliot Spitzer’s long-running propaganda campaign and lawsuit against former New York Stock Exchange chairman and CEO Richard Grasso has been a frequent topic on this blog, so I couldn’t help but notice this NY Post article (hat tip to Peter Lattman) in which Grasso is derided for defending his lucrative pay package during a recent television interview. I mean, why should anyone make that much money, right?
Meanwhile, for a much more lucid analysis of the true issues should be in the Grasso lawsuit, check out this Larry Ribstein post:

[T]he main thing to keep in mind is that [Grasso’s] pay was approved by a highly sophisticated board. The only issue should be whether that board was informed. This is the way it should and would be in a standard fiduciary duty case (e.g, Disney). There is significant reason to believe it was, . . .
Alas, this isn’t the end of the matter because the NYSE was a non-profit that comes under Eliot Spitzer’s tender care. Grasso’s trial has been broken into two parts, so that the trial judge first rules on reasonableness separate from board process. In the first part, . . . Spitzer will try to prove “that the pay judgments of executives who worked in the highest echelons of the business community were not ‘reasonable.'” In other words, a NY trial judge may end up substituting his judgment for that of a board that included the likes of the Treasury Secretary and former head of Goldman Sachs.

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Gripping already for the Ryder Cup

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Rydercup06logo2.jpgThe United States has lost four out of the last five Ryder Cup competitions, so it’s not particularly surprising that some U.S. golf fans are viewing the 2006 Ryder Cup competition next month at the K Club in Ireland with some trepidation. However, former Houstonian and noted teaching professional Butch Harmon is already gripping particularly hard in anticipation of the competition, and Brett Wetterich — who will be playing in his first Ryder Cup competition for the American team — is the target of Harmon’s nervousness:

Brett Wetterich, who squeezed into the US Ryder Cup team in the last available qualifying spot, will have to greatly improve his attitude at next month’s Ryder Cup match at the K Club.
At least that’s the way widely-respected US swing coach and Sky Sports analyst Butch Harmon sees it.
Harmon told Sky Sports he was “appalled” by what he saw on day two at the 9th hole at last week’s PGA Championship where Wetterich, destined to miss the cut by nine shots after shooting a 2nd-round 77, took four shots to get out of some greenside rough.
Harmon says he was infuriated by Wetterich’s attitude.
“I was appalled by what I saw with Brett Wetterich,” he told Sky Sports. [. . .]
“This isn’t the kind of guy you want on your Ryder Cup team,” Harmon said of Wetterich.

H’mm. I guess Wetterich will at least have something to talk about with Tiger Woods during the Ryder Cup competition.

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The drift of the Nacchio prosecution

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cliff stricklin.jpgThis Denver Post article reports on the appointment of former Enron Task Force prosecutor Cliff Stricklin as the lead prosecutor in the Justice Department’s criminal case against former Qwest CEO Joe Nacchio on insider trading charges. Stricklin was a member of the Task Force’s team that handled the Lay-Skilling trial, although he sat about fourth chair and did very little in the courtroom during the trial.
However, neither the fawning Post article nor the other media accounts of Stricklin’s appointment that I have seen mention Stricklin’s dubious conduct in the first Enron Broadband trial, which did not turn out quite so “successfully” for the Task Force as the Lay-Skilling trial. As noted in this earlier post, Stricklin was one of the lead prosecutors during that debacle in which the prosecution was caught eliciting false testimony from one of the Task Force’s main witnesses and threatening two defense-friendly witnesses (Beth Stier and Lawrence Ciscon). Then, to top it off, U.S. District Judge Vanessa Gilmore cut off Stricklin from further cross-examination of one of the defendants and rebuked him in open court during the latter stages of that trial when Stricklin violated one of the court’s limine orders. That trial — which appeared to be a tap-in for the Task Force at the outset — ended in a crushing defeat for the Task Force.
In the Post article noted above, Colorado U.S. Attorney Troy Eid issued the following statement about Stricklin:

“Cliff’s extraordinary background, including his work on the Enron Task Force, makes him the ideal leader to handle the Joseph Nacchio case while serving Colorado as first assistant U.S. attorney.”

Yeah, right.