NEW YORK: Former New York Stock Exchange (NYSE) chairman Richard Grasso has sued his replacement, John Reed, and the exchange, alleging they defamed him in comments at press conferences and to reporters.
Grasso, who left the exchange in September, also alleges breach of contract.
The suit, filed Tuesday in New York federal court, cites a handful of instances where Reed criticized his predecessor, who resigned over his nearly $190 million compensation package for which he is being sued in an ongoing battle with the NYSE.
For example, Grasso's suit notes an interview Reed gave to the Financial Times in November, during which Reed said Grasso "was obviously sitting on top of a lot of problems, with which today we have to deal."
The month before, Reed told Bloomberg News that there were "necessary changes to be made" at the stock exchange because of Grasso's poor "corporate governance," according to court papers.
"The Exchange and Mr. Reed must be held accountable for their shameful conduct and the injury that they have caused to Mr. Grasso," the suit said.
The exchange referred questions to its attorney, Michael York, who said that he speaks for Reed.
"We've looked through this filing thoroughly," York told PRWeek. "We're pretty much limiting ourselves to telling folks that we don't see any factual or legal basis for it."
Grasso's countersuit is likely an attempt at spurring a settlement to take the case out of the media, said Harlan Loeb, litigation director at Hill & Knowlton. H&K is not involved in the case.
"Countersuits are often a shot across the bow defensively to begin to position settlement discussions," Loeb said, "and to position them to be more favorable."
Ketchum, which does PR work regularly for the NYSE, has been asked to forward any media questions about Grasso's suit to the exchange itself.