(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

Former Citigroup Head Named Interim NYSE Chair

The New York Stock Exchange board named John S. Reed to serve as interim chairman and chief executive officer. Mr. Reed was named to fill the vacancy left by the departure of former chairman Richard Grasso, who resigned amid controversy over his new contract and compensation package.

Mr. Reed, the former chairman and co-chief executive officer of Citigroup, will join the exchange on September 30th, 2003. He retired from Citigroup in April 2000. Prior to the merger of Citicorp and Travelers Group Inc. in 1998, Mr. Reed was the chairman and chief executive officer of Citicorp and Citibank from 1984 to 1998. He had been with Citibank since 1965. Mr. Reed received undergraduate degrees from Washington and Jefferson College and the Massachusetts Institute of Technology and a master's degree from MIT.

"My priority will be to ensure that this board is effective and can get its job done," Mr. Reed stated, and added that "the governance reforms we will propose are critical at this juncture." SEC Chairman William Donaldson stated that Mr. Reed "is independent, experienced and has impeccable credentials all of which will be crucial as he works with the NYSE board to ensure the highest standards of governance." He noted that "the SEC, in its oversight role, will continue to work to help effect an improved governance structure at the New York Stock Exchange."

Mr. Donaldson had been critical of the exchange's contract with Mr. Grasso. In a letter to exchange board members, the SEC chairman stated that "the approval of Mr. Grasso's pay package raises serious questions regarding the effectiveness of the NYSE's current governance structure." He added that he was "especially concerned that the pay package was awarded before the exchange completed its governance review." Prior to Mr. Grasso's resignation, the SEC chairman had asked the exchange to provide extensive information about the procedures and considerations concerning the award of Mr. Grasso's pay package.