Reply #19: S.E.C. Asked Grasso if He Buoyed Stock (Grasso pleads 5th 150+ times)

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http://www.nytimes.com/2006/06/15/business/15aig.html?ex=1308024000&en=31c8709f85340a62&ei=5088&partner=rssnyt&emc=rss

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Richard A. Grasso, the former chief executive of the New York Stock Exchange, faced questions from federal regulators about whether he prodded traders to support the American International Group's share price while he was head of the exchange and its regulatory unit, government documents released yesterday disclosed.

During Mr. Grasso's deposition, given before the Securities and Exchange Commission in June 2005, he repeatedly invoked his Fifth Amendment right against self-incrimination, in spite of warnings from S.E.C. lawyers that doing so could be used against him in a civil case.

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S.E.C. lawyers asked Mr. Grasso in the 2005 deposition whether he had tried to placate powerful executives like Maurice R. Greenberg, the chairman and chief executive of A.I.G., by encouraging the A.I.G. specialists — those assigned to manage floor trading in the stock — and their superiors to prop up the price of the stock, going as far as to set up a $17 million fund to buy shares.

While he invoked the Fifth Amendment in front of S.E.C. lawyers in 2005 in response to various questions, in 2006 he answered many of the same questions in a deposition related to Mr. Spitzer's lawsuit. In the deposition, he said he did not encourage the traders to prop up A.I.G. shares.

Mr. Spitzer is expected to make the case that it was important for Mr. Grasso to appease Mr. Greenberg because he was a member of the compensation committee at the exchange from 1996 until 2002. In 2001, Mr. Grasso received $25.6 million in salary, bonus and deferred compensation.

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