Attack on NYSE as purge demanded

MORE heads look set to roll at the New York Stock Exchange with a leading member demanding the resignation of executives linked to former chairman Richard Grasso, and a full independent audit of the market's books.

The call came as the third-largest US pension fund threw its weight behind pressure for a complete revamp of the Exchange's structure, saying it should set a 'gold standard' for disclosure with yearly public reports from key committees.

The twin salvoes indicate that the departure of Grasso - who resigned last week amid a row over his $140m (£85m) pay package - is unlikely to end the turmoil at the world's pre-eminent stock exchange.

They also underscore the challenges facing John Reed, the former Citigroup executive appointed to succeed Grasso on an interim basis. Reed has yet to start work at the NYSE. A search committee led by Laurence Fink is seeking a permanent replacement.

NYSE member Francis Maglio was quoted saying that he had been pressing for full disclosure of the Exchange's books since June. He had now gone public with his demands to raise the pressure. 'We want a full and complete audit at the charitable foundation and all compensation at the NYSE,' Maglio said, suggesting that more board members could resign if such an audit were undertaken. Maglio also called for the resignation of the Exchange's acting lead director H. Carl McCall and Kenneth Langone, a long-time friend of Grasso.

'They have vigorously defended this offensive pay package and realise they are wrong and stated so,' he said.

A spokesman for the NYSE declined to comment on the resignation calls. He said it published audited figures each year.

Meanwhile, the $100bn California State Teachers' Retirement System (Calstrs) has written to McCall and fellow member Leon Panetta, outlining reforms to separate the NYSE's regulatory functions from business dealings to eliminate potential conflict of interest.

Calstrs and other leading funds were instrumental in raising the pressure on Grasso to quit. McCall and Panetta chair a special committee on governance issues.

'Improvements are needed in the Exchange's governance structure in order to give both the fact and the appearance of alignment of interest between the Exchange and the investing public,' Calstrs said in its letter.

The roles of NYSE chairman and chief executive - both held by Grasso - should be split, it said. Most of the NYSE board should be made up of independent directors and directors should not sit on each other's boards.