The Five Dumbest Things on Wall Street This Week: July 3

Grasso Miscarriage of Justice

Thanks to some doubled-barreled dumbness, New Yorkers are going to be stuck with a $70 million tax bill and have nothing to show for it.

It all started in 2003, when Eliot Spitzer -- the man who made his name as New York's top prosecutor by using the court system to terrorize Wall Street executives -- decided to sue the former head of NYSE Euronext(NYX Quote), Dick Grasso, over his $187.5 million pay package. The compensation was thought to be a tad excessive, because at the time the exchange was organized as a not-for-profit company.

Such companies have limits, albeit ill-defined ones, on how much not-for-profits can pay their executives.

Despite hours of testimony from the crème of Wall Street and the massive spending over the four years spent pursuing the case, Spitzer -- whose reputation is already tarnished by his involvement with a prostitute while serving as New York's governor -- couldn't even land a result.

But he won't be paying the bill. Taxpayers will.

Thanks, Eliot!

The only thing dumber than that is the fuzzy logic of the court that let Grasso off the hook.

The judges concluded that the NYSE fixed everything by converting to a for-profit company in 2006. Huh? The case was filed in 2004, so surely whatever happened two years later has nothing to do with Grasso's compensation.

James McGuire, a judge in the case, had the dubious task of authoring the opinion reflecting the court's 3-1 decision, which said that the government lost the right to pursue the case when the NYSE changed its stripes.

So who's dumber, Spitzer or McGuire? That's the $70 million question.

Dumb-o-meter score: 85. Yeah, but this doesn't mean that Grasso deserves the dough.