July 1 (Bloomberg) -- Richard Grasso, the former New York Stock Exchange chairman who became a poster child for Wall Street excess, won a court ruling that allows him to keep his entire $190 million pay package.

A state appeals court in Manhattan today dismissed the remaining claims against him for excessive pay, and Attorney General Andrew Cuomo announced he won't appeal further.

``We have reviewed the court's opinion and determined that an appeal would not be warranted,'' Cuomo spokesman Alex Detrick said. ``Thus, for all intents and purposes, the Grasso case is over.''

The court said ex-New York Attorney General Eliot Spitzer, who sued in 2004, lost the authority to recover the money when the Big Board was converted to a for-profit business two years later. Grasso, 61, won a different appeal in the case last week when the state's highest court threw out four of six claims against him. Today's ruling wiped out the other two.

The state was seeking ``only a money judgment that would benefit the owners of the for-profit entity into which the not- for-profit has been converted,'' the appeals court said. The case ``vindicates no public purpose,'' it said in an opinion by Justice James M. McGuire.

``It's a confirmation of the belief I've held for the last five years in our justice system and my having performed in a manner consistent with my responsibilities,'' Grasso said in an interview. ``Right now I'm going to turn to my family and we're going to move on to the next chapter,'' he said.

`I Told You So'

The court also threw out the only claim against Kenneth Langone, co-founder of Home Depot Inc. and former chairman of the NYSE compensation committee. Spitzer accused Langone of breaching his duty to the exchange by misleading its board on Grasso's pay.

``My reaction is, I told you so,'' Langone said in a telephone interview. ``There was never a case here. What more can we say? The enormous waste was a travesty.''

Langone said he, Grasso and NYSE directors spent more than $70 million fighting the case, all covered by insurance.

``I would like to ask the attorney general how much his office has spent since it started this lawsuit four years ago,'' Langone said.

The appeals court said the judge in Grasso's case, Charles Ramos, was wrong in 2006 when, without holding a trial, he ordered the ex-chairman to repay portions of his retirement pay estimated at $112.2 million by the state. Ramos was also wrong in holding that the state's right to sue outlived the Big Board's status as a not-for-profit, the appeals court said.

NYSE Board

The court disagreed with Ramos's conclusion that the exchange board was not fully informed about Grasso's retirement benefits. There was evidence the board knew of the accumulated amounts in Grasso employment agreements and at one point took actions to limit its growth, the judges said.

Spitzer sued Grasso in 2004, eight months after the chairman was forced from his job over the amount of his pay. The state claimed the $190 million in compensation in the top position violated the state law saying officers of not-for-profits must be paid ``reasonable'' amounts.

Spitzer's spokeswoman Brandy Bergman declined to comment on today's ruling.

Grasso was chairman and chief executive officer from 1995 to 2003 at the exchange, where he started as a clerk and spent 35 years.

A successor to Grasso, CEO John Thain, accelerated the Big Board's push into electronic trading through a merger with Archipelago Holdings Inc.

New Ticker

The deal closed March 7, 2006, to create NYSE LLC, a for- profit company. NYSE shares, trading under the ticker NYX, debuted the following day. Thain has since become CEO of Merrill Lynch & Co.

``This ruling recognizes the substantial and significant changes the New York Stock Exchange has undergone since the case was brought,'' exchange spokesman Richard Adamonis said in an interview.

In August 2003, a statement from the exchange revealed a $139.5 million payout to Grasso. Henry Paulson, then CEO of Goldman Sachs Group Inc., led a rebellion of NYSE board members, and Grasso resigned less than a month later.

After directors forced Grasso out, a report for the exchange by attorney Dan K. Webb of the Chicago law firm Winston & Strawn concluded the ex-chairman's pay was ``far beyond reasonable.''

Grasso got about $150 million in excess pay in the chairman's job, Webb said at the time.

Changes in Office

Cuomo continued to pursue the case after the 2006 elections, when he was elected attorney general and Spitzer governor. Spitzer resigned in March of this year amid a federal investigation of a call-girl ring.

The appeals panel today upheld the dismissal of Grasso's cross-claims against the exchange for breach of contract, defamation and disparagement. The ex-chairman declined to comment on whether he will appeal.

In a dissenting opinion, Justice Angela Mazzarelli said the stock exchange's becoming a for-profit corporation ``has no effect whatsoever upon the causes of action that were pending against the not-for-profit at the time of the merger.''

The majority decision might lead to the ``absurd result'' of the state's capacity to sue being dependent on a not-for-profit's maintaining its status throughout litigation and would encourage changes simply to escape the attorney general's reach, she wrote.

The case is New York v. Grasso, Index 401620/04, New York Supreme Court, Appellate Division, First Department (Manhattan).

To contact the reporters on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net; Thom Weidlich in New York at tweidlich@bloomberg.net.

Last Updated: July 1, 2008 17:40 EDT