Former NYSE Chairman Richard Grasso, and Greed

The LA Times reported a pleasant congruence of newsworthy events, in its 10/20/2006 Business Section: The Dow Jones closing above 12,000 for the first time, and the release of State Supreme Court Justice Charles Ramos' ruling that the former New York Stock Exchange Chairman, Richard Grasso, might be forced to return $100 million to the Exchange.
Justice Ramos made a point of basing the restitution order on the fact that Grasso was serving as Chairman, an office with "fiduciary" standards owed to the organization he purported to serve while milking it with a stratospheric "compensation package" in excess of $187.5 million per annum. The Court rejected Grasso's argument that the NYSE board made up of top Wall Street executives was "informed" and approved his pay. Interestingly, Grasso contended that he himself did not know how much he was making, a fact that Justice Ramos labelled shocking: "That a fiduciary of any institution, profit or not-for-profit, could honestly admit that he was unaware of a liability ofo over $100 million...is a clear violation [of fiduciary duties]."
In the May 2004 law suit brought by New York Attorney General Eliot Spitzer, Grasso was proved to have stocked the Board with cronies and then misled them about the magnitude of his ballooning pay, including more than $100 million in retirement benefits quietly accrued in his last few years on the "job".
Greed is not necessarily good or bad, and it is not a quality which is going to disappear, not matter how much it is condemned. However, where it is compounded with fraud -- concealments, misdirection, misrepresentation, and violation of fiduciary duties -- the act of benefitting oneself at the expense of others who are in no position to object or even realize what is happening, is simply a form of theft. It is a crime, a wrong, a violation of laws, and a distortion of the "free" market. For a "business" person to indulge in thievery, instead of exchange, is to destroy the market. His act is tantamount to market murder, in that it puts fear into the marketplace, and obstructs the transactions that otherwise would occur, killing them.
Equally shocking, however, is how LITTLE the "sanction" really is, relative to the scale of the offense. As sharply critical as Justice Ramos is of Grasso's testimony, he is still limiting the sanction to restitution. His ruling seems limited to a species of disgorgement. In other words, Grasso (and future Grasso's hiding in other grass) had NO RISK: Either he gets away with stealing, or he is caught and has to give up what he stole. Mere disgorgement is not a disincentive.