On August 27, 2003, it was revealed that Grasso had been given a deferred compensation pay package worth almost $140 million. This caused immediate controversy, as the hand-picked compensation committee consisted mainly of representatives from NYSE-listed companies over which Grasso had regulatory authority as its CEO.On May 24, 2004, Grasso was sued by New York State Attorney General Eliot Spitzer demanding repayment of the majority of the $140 million pay package. Prior to being dismissed Grasso had been in line to receive an additional $48 million over the $139.5 million he had already received; he was not paid the additional funds.
Won, July 1, 2008
On July 1, 2008, the New York State Court of Appeals dismissed all claims against Grasso. The majority opinion stated that since the NYSE was now a subsidiary of a for-profit multinational corporation, the State of New York had no oversight over the affairs of the company in this matter and that prosecution was "not in the public interest".