NYSE Posts 54% Drop in Profit, Citing Legal Costs

The New York Stock Exchange said its net income fell 54% to $5.4 million in the second quarter, primarily because of increased legal expenses related to a lawsuit seeking to recover some of former Chairman Richard Grasso’s pay.

At current NYSE Chairman John S. Reed’s behest, New York Atty. Gen. Eliot Spitzer in May sued Grasso to recoup at least $100 million of Grasso’s pay.

Lawyers for Grasso, who was ousted in September, moved the case to federal court and filed a suit claiming he is owed $50 million more. The exchange has filed motions seeking to move the case back to state court.

The NYSE, in its earnings report Monday, said revenue in the second quarter rose 1% to $273 million from $270.2 million a year earlier.

In a conference call, NYSE Chief Financial Officer Amy Butte said the Big Board had expended more than $20 million in legal expenses year to date. Normally, the exchange spends “no more than $6 million per year,” she said.