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CNN Live At Daybreak

Big Board Resignation: Richard Grasso Quits as NYSE Chairman

Aired September 18, 2003 - 06:48   ET

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


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


CAROL COSTELLO, CNN ANCHOR: Time now for a little business buzz. Things have also been pretty stormy at the New York Stock Exchange, and we don't just mean active stock trading.
Let's get the scoop from Carrie Lee live in New York.

Good morning -- Carrie.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol.

Richard Grasso resigned last night as Chairman and CEO of the New York Stock Exchange. There's been a lot of criticism about his position in recent weeks regarding his $140 million pay package. So last night shortly after the closing bell, Grasso had called an emergency meeting, and then shortly after the market closed, offered to resign as chairman and CEO if the board of directors requested it, which they did in a vote of 13 to 7.

Now among the board members who voted for him to leave, Goldman Sachs CEO, the CEO of J.P. Morgan, also the head of Morgan Stanley and former Secretary of State Madeline Albright. State Treasury officials involved called it a necessary step.

Among other opinions, Alan Hevesi, New York State Comptroller, issued a statement last night saying, "Dick Grasso's" resignation -- "decision to resign was the right one. It's best for the New York Stock Exchange. However, the issue is not just Mr. Grasso. The issue is making fundamental reforms at the Exchange to restore investor confidence. The issue is also to establish a model for the entire financial community of good corporate governance, accountability and disclosure. Now that Mr. Grasso has stepped down, we can move forward with those reforms."

This really calls a lot of questions into play right now. No. 1, they need to find a replacement for him. And No. 2, what does this mean for governance of the exchange going forward? So remains to be seen.

Early indications for stocks, though, do look pretty favorable this morning. We saw some selling last night in issues, maybe a knee- jerk reaction to this news, but it looks like investors have rebounded a little bit. Maybe, Carol, they feel like this is behind them a bit. So things looking pretty good for stocks so far this morning. We'll see how it plays out.

COSTELLO: Yes. LEE: By the way, Nike and Palm also reporting profits after the bell tonight, so we'll be watching those two names as well.

COSTELLO: Definitely so. Carrie Lee live from the Nasdaq market site.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Chairman>


Aired September 18, 2003 - 06:48   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time now for a little business buzz. Things have also been pretty stormy at the New York Stock Exchange, and we don't just mean active stock trading.
Let's get the scoop from Carrie Lee live in New York.

Good morning -- Carrie.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol.

Richard Grasso resigned last night as Chairman and CEO of the New York Stock Exchange. There's been a lot of criticism about his position in recent weeks regarding his $140 million pay package. So last night shortly after the closing bell, Grasso had called an emergency meeting, and then shortly after the market closed, offered to resign as chairman and CEO if the board of directors requested it, which they did in a vote of 13 to 7.

Now among the board members who voted for him to leave, Goldman Sachs CEO, the CEO of J.P. Morgan, also the head of Morgan Stanley and former Secretary of State Madeline Albright. State Treasury officials involved called it a necessary step.

Among other opinions, Alan Hevesi, New York State Comptroller, issued a statement last night saying, "Dick Grasso's" resignation -- "decision to resign was the right one. It's best for the New York Stock Exchange. However, the issue is not just Mr. Grasso. The issue is making fundamental reforms at the Exchange to restore investor confidence. The issue is also to establish a model for the entire financial community of good corporate governance, accountability and disclosure. Now that Mr. Grasso has stepped down, we can move forward with those reforms."

This really calls a lot of questions into play right now. No. 1, they need to find a replacement for him. And No. 2, what does this mean for governance of the exchange going forward? So remains to be seen.

Early indications for stocks, though, do look pretty favorable this morning. We saw some selling last night in issues, maybe a knee- jerk reaction to this news, but it looks like investors have rebounded a little bit. Maybe, Carol, they feel like this is behind them a bit. So things looking pretty good for stocks so far this morning. We'll see how it plays out.

COSTELLO: Yes. LEE: By the way, Nike and Palm also reporting profits after the bell tonight, so we'll be watching those two names as well.

COSTELLO: Definitely so. Carrie Lee live from the Nasdaq market site.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Chairman>