Eliot Spitzer, who’s dramatic demise over the past few days has been covered backwards and forwards by every media outlet in the country, is not getting a lot of sympathy from Wall Street reps or executives. Many of them are celebrating the fact: Merrill Lynch’s board of directors is said to have cheered euphorically at the news that the crusading former attorney general—and now former governor—had become the client of a high-end prostitution ring, forcing him to resign, according to advisors at the firm.
“In technical terms, the guy is a prick,” says one Merrill Lynch advisor who preferred to speak off the record. “That $100-million [research] settlement he got out of Merrill was complete bullying. It was exactly this kind of steamrolling that was just typical of him. He used that settlement with us to go after everyone else on line. He’s the walking epitome of what comes around goes around.” Ultimately, every major U.S. investment bank settled in the stock research scandals, with SEC fines totaling $1.4 billion.
Of course, that kind of schadenfreude shouldn’t come as any surprise. The former New York attorney general, who announced his resignation as governor of New York today, was seen by many who worked on Wall Street as an overzealous crusader, interested more in forwarding his own career than in the business ethics he claimed to champion. His investigations into financial- services firms for numerous violations of securities laws—including the research conflicts-of-interest scandal, mutual-fund market timing and insider trading—were often characterized as a witch hunt.
Spitzer was said to court media attention for his investigations by leaking information about the wrongdoings of firms to reporters, instead of issuing official statements. The irony is that Spitzer may never have gotten as much media attention as he’s getting now. To top it off, tonight CNBC will air "The Rise and Fall of Eliot Spitzer: A CNBC Special," which will cover, among other topics, the impact he had on the business of Wall Street.
Whatever his past influence, though, Spitzer’s fall isn’t going to have a lot of impact on the daily lives of financial advisors. “When it’s all said and done, it’s just another sad story, but it doesn’t impact how we do business. That is ancient history,” the advisor said.
