New York ? New York’s attorney general sued former New York Stock Exchange chairman Richard Grasso on Monday, saying the $187.5 million pay package that led to Grasso’s ouster last year was “wholly inappropriate and illegal.”

Atty. Gen. Eliot Spitzer announced the action against Grasso and former stock exchange board member Kenneth Langone, a close friend of Grasso’s and ex-chairman of the exchange’s compensation committee. The suit, which also named the NYSE itself, followed a four-month investigation.

New York Atty. Gen. Eliot Spitzer points to a copy of evidence during a news conference in New York. Spitzer announced Monday that former New York Stock Exchange chairman Richard Grasso would be sued for his excessive compensation package.

Grasso, who was widely praised in 2001 for his efforts to get the stock exchange back in business after the terrorist attacks, resigned as NYSE chairman and CEO last September amid intense criticism of his pay.

The attorney general’s suit asked that a state judge rescind the pay package and determine a “reasonable” level of compensation for Grasso.

“This case demonstrates everything that can go wrong in setting executive compensation,” Spitzer said. “The lack of proper information, the stifling of internal debate, the failure of board members to conduct proper inquiry and the unabashed pursuit of personal gain resulted in a wholly inappropriate and illegal compensation package.”