Spitzer’s Targets Included Greenbergs, Analysts and Stock Exchange CEO

March 10, 2008

New York Gov. Eliot Spitzer, embroiled in a sex scandal that could force his resignation, made his reputation by prosecuting some of the most powerful players on Wall Street in the wake of the dot-com bubble collapse.

The New York Times reported that Spitzer was caught on a federal wiretap arranging to meet with a $1,000-an-hour prostitute at a Washington hotel last month. At a press conference, Spitzer apologized to his family and to the public for a “private matter.” But he made no reference to the New York Times report.

Spitzer rose to political stardom while state attorney general through high-profile investigations of improper business practices by major Wall Street firms.

The following are some of those targets.

Maurice “Hank” Greenberg. The former American International Group chairman and chief executive officer was forced out in 2005 following accusations of improper accounting leveled by Spitzer, then attorney general, and the Securities and Exchange Commission.

Jeffrey Greenberg. He resigned as chief executive officer of Marsh & McLennan Cos in October 2004, 11 days after Spitzer, then attorney general, accused the insurance broker of rigging bids and colluding with insurers to fix prices.

Richard Grasso. He ran the NYSE for eight years and was forced out after an outcry over his compensation. He was sued in 2004 by Spitzer, who contended the pay package violated state law. A New York appeals court dismissed 4 of 6 claims in 2007.

Jack Grubman, formerly a telecom analyst at Salomon Brothers Smith Barney, and Henry Blodget, formerly an Internet analyst at Merrill Lynch & Co. The former star Wall Street analysts were banned from the securities industry after a Spitzer investigation of investment banks’ conflicts of interest and fraudulent stock research. Grubman paid $15 million in penalties and Blodget paid $4 million, without admitting guilt.

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