The Securities and Exchange Commission is reportedly issuing subpoenas to former New York Stock Exchange chairman Dick Grasso and others as it examines whether Grasso engaged in "influence trading" during his eight years leading the exchange.
The Wall Street Journal, citing unidentified people close to the situation, reported Friday that the SEC is looking into whether Grasso urged the NYSE's specialists, who bring buyers and sellers together on the floor of the exchange, to buy additional shares of American International Group Inc. in an attempt to shore up the company's flagging stock price.
The report noted that AIG chairman Maurice "Hank" Greenberg complained in 2002 that the specialists had not done enough to curb the drop in price. Greenberg was a member of the NYSE board and was part of its compensation committee. In 1999, the compensation committee approved Grasso's $187.5 million salary and retirement package, over which Grasso resigned last year.
The incident came to light in October, just as the furor over Grasso's compensation reached its peak. Greenberg is no longer a member of the NYSE board.
The SEC is also issuing subpoenas to Greenberg as well as specialists from Goldman Sachs subsidiary Spear, Leeds & Kellogg, the specialist firm that manages AIG stock, the Journal said, citing people close to the situation.
The NYSE had no comment on the subpoenas. Calls to Goldman Sachs, AIG, the SEC and Grasso attorney Brendan Sullivan were not immediately returned Friday.
