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CNN BREAKING NEWS

NYSE Chairman Grasso Resigns

Aired September 17, 2003 - 18:39   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU DOBBS, CNN HOST: We have just received word that New York Stock Exchange Chairman Richard Grasso has resigned. Grasso tendered his resignation to the board of directors amid the outrage over his $140 million pay package.
Christine Romans joins me now. This, as we reported at the outset of the broadcast, looked to be the only possible outcome.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: It did, and it looked that way even more the last couple of days. It was a few weeks ago, Lou, that it was really hard to get somebody on the record to say they thought Mr. Grasso should go and then the chorus of voices over the past couple of days has been pretty -- pretty daunting, right down to a couple of Democratic presidential candidates, more, you know, important people in the market.

DOBBS: John Edwards -- Senator John Edwards, Senator Joe Lieberman.

ROMANS: And then the head of LaBranche, which is the largest special firms. That's a big blow, although, LaBranche, of course, is having its own dispute with the New York Stock Exchange.

DOBBS: To explain, LaBranche controls about 25 percent of all of the specialist trades on the New York Stock Exchange.

ROMANS: They own about 436 seats -- or control 436 of those 1366 seats.

A lot of changes in store here and a lot of people have, you know, their own interests to talk about as we go forward. Some want to see the chairman and the CEO position separated. Some want to see the regulatory role of the exchange lessened.

DOBBS: Right. And what I think probably a lot of people right now, on the board of directors of the New York Stock Exchange want the questions to end about how Dick Grasso was paid such a monumental amount of money working for a not-for-profit organization and a quasi- regulatory agency. The outrage is not going to dissipate. It may dissipate, but it certainly will the not disappear with his resignation.

ROMANS: There are a lot of people on that board who were architects of that pay package, approved that pay package. There are others who said they didn't know the extent of it. They thought there might have been, you know, some decimal issues. DOBBS: There has to be a concern as well on that floor of that exchange, and certainly amongst the specialists, the traders, the members, that this could be a pivotal moment for the New York Stock Exchange because the entire system is threatened.

For example, there are members of that board of directors who wanted to end the specialist system itself years ago.

ROMANS: It's an interesting place where they are right now. And who will succeed Dick Grasso is really important. Larry Suncini (ph), who is on the board of directors. But that's just temporary. So we don't know if it'll be Bob Bricht (ph) or Kate Kennison (ph), someone who's already at the NYSE, what it's going like next.

There is this corporate governance overhaul that the stock exchange has been undergoing, and has a report to the SEC that is due October 2. There's a board meeting scheduled for next week, a member's meeting tomorrow. So we're going to be hearing more about this.

DOBBS: Absolutely. Dick Grasso, 57 years old, a lifetime staffer at the New York Exchange, chairman, has resigned as of today. So we appreciate it. Christine Romans.

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