ALBANY — New York’s four-year-old case against the former head of the New York Stock Exchange, Richard A. Grasso, has come to an end.

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Mary Altaffer/Associated Press

Richard A. Grasso, shown last year in New York.

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CNBC Video: Grasso Discusses Dismissal of Claims

On Tuesday afternoon, a midlevel New York appeals court ordered the dismissal of the remaining claims against Mr. Grasso, the former chairman and chief executive of the exchange, over his $187.5 million compensation package.

A short time later, a spokesman for the New York Attorney General said the office would not appeal the ruling.

In its ruling, the Appellate Division of State Supreme Court concluded that the state attorney general’s authority to pursue the claims lapsed when the stock exchange changed from a nonprofit to a for-profit corporation. Last week, the Court of Appeals — New York’s top court — dismissed four claims against Grasso’s 2003 compensation package.

The midlevel court concluded Tuesday that seeking to recover money for two remaining claims under New York’s Not-For-Profit Corporation Law would simply benefit the N.Y.S.E.’s private owners. The court also dismissed a claim against the founder of Home Depot, Kenneth G. Langone, who was chairman of the exchange’s compensation committee and was accused of misleading other directors about Mr. Grasso’s pay.

Justice James McGuire wrote that based on case law and the “evident purpose” of the not-for-profit law, the attorney general’s authority to pursue the claims “lapsed” when the exchange became a for-profit corporation. He wrote for the court majority.

In a lone dissent, Justice Angela Mazzarelli said the change in corporate status had “no effect whatsoever upon causes of action that were pending against the not-for-profit.” Under the law, the attorney general also brings claims as the state’s chief law enforcement officer, not simply as a surrogate for the corporation, she wrote.

First started by then Attorney General Eliot Spitzer, the lawsuit sought to recover money paid to Mr. Grasso, calling them excessive and an unlawful transfer of exchange assets.

The Court of Appeals concluded last week that the attorney general exceeded his authority with four claims that said the state can sue to protect the public interest. Instead, judges noted the not-for-profit law contained specific provisions for addressing alleged fault by officers and directors.

“Mr. Grasso is gratified by the Appellate Division decision,” his lawyer, Gershon Zweifach, said. He declined further comment.

Mr. Langone’s lawyer, Gary Naftalis, said they were gratified with the decision to dismiss the case. “We always believed that this was a case that should never have been brought,” Mr. Naftalis said.

According to court documents, Mr. Grasso’s base salary from 1995 through 2002 was roughly $1.4 million, with bonuses that escalated from $900,000 in 1995 to $10.6 million in 2002. His 2003 agreement provided a lump sum of $139.5 million, with an additional $48 million payable over four years.

State attorneys argued that the compensation committee was hand-picked by Mr. Grasso and ignored a benchmark system in calculating his pay. They also noted several directors expressed disapproval of the 2003 package, which was left off a meeting agenda, then brought up and approved at the last minute when opponents were missing and others had no chance to review the details in advance.

Reaction to the compensation forced Mr. Grasso to resign, prompting an internal investigation and a request from the board for Mr. Spitzer and the federal Securities and Exchange Commission to investigate.