The Five Biggest Scandals of 2003

One of the fonder traits of financial luminaries is their penchant for sharing. The more generous ones dole out huge sums to charities, but in 2003, the rage was sharing the hedonistic details of their lives -- on video, in emails, in boardroom documents -- virtually every place where you'd think these brains would know better.

While some of these "legends" aren't much for smarts, their desire to share with us how rich they truly are -- and how stupid -- makes for a colorful recounting of the five biggest financial scandals of 2003. If it weren't for all the party paraphernalia they left behind, we'd be left with only one catastrophe to recount: the mutual fund mess.

Hence, our count of the top five financial scandals, and all the brains that made them happen.

1. Dick Grasso: Such Big Bucks for Such a Little Man

Everybody knew New York Stock Exchange Chairman Grasso was a big man on Wall Street, but not until 2003 did we find out he was $140 million big.

When the NYSE released documentation surrounding Grasso's pay package on Sept. 10, swarms of financial journalists elbowed each other to get a quick read of a decade's worth of information that would ultimately explain how a financial regulator like Grasso earned $140 million over his 35 years at the NYSE.

The answer? Grasso was blessed. In fact, Grasso himself was the first person to admit this: Every time he returned to the boardroom after the compensation committee voted him a huge bonus, Grasso would say, "Thank you. I'm blessed." So who are we to argue with him?

Unfortunately (well, fortunately for Grasso), Committee Chairman Carl McCall didn't see the need to argue either. After bestowing upon Grasso huge bonuses, McCall said he didn't fully understand how large Grasso's entire pay package actually was. These are embarrassing words when stated by the former comptroller for the State of New York. And even more embarrassing when it was later revealed that Grasso was promised another $48 million for good measure.

So Grasso made a couple of bucks -- so what? Wasn't he the guy who single-handedly turned on the lights at the exchange after Sept. 11, 2001? Yes, Grasso helped trading resume after the terrorist attack, but so did the NYSE's employees, traders and specialists -- none of whom received a $5 million bonus for doing so. (Although the year in scandals also revealed that some specialists on the floor have been taking their bonuses whenever they please.)

The problem was that Grasso's paycheck was being signed by the firms he was being paid to regulate. So in a post-Enron world, Grasso had to go. He was an anachronism to a different time in corporate America, a time when backslapping substituted for corporate governance. But with $140 million, the nation's highest-paid regulator will be going away in style.