Eliot Spitzer: Physician, Heal Thyself

by: Vahan Janjigian, CFA

Saying that Eliot Spitzer is a hypocrite is stating the obvious. Yet it is a little gratifying to see this "holier than thou" crusader get caught in his own ethical lapse. Spitzer made a career of ruining the reputations of numerous businessmen; not by convicting any of them of doing anything criminal, but by threatening to indict their companies if they didn't resign.

Richard Grasso, Ken Langone, and Hank Greenberg are still trying to get their reputations back. Take Grasso for instance. What was his big crime according to Spitzer? He was paid too much. That's undoubtedly true. Personally, I think anyone who gets paid more than me is paid too much, but that doesn't constitute a crime. Spitzer also went after a number of directors at the NYSE, but he decided to give former New York State comptroller H. Carl McCall a pass. Perhaps he felt he needed McCall's support in his ambitious quest to become governor.

Today's Wall Street Journal mentioned a speech Spitzer gave to the New York Society of Security Analysts in 2003. I was there. I remember being disappointed that the NYSSA chose to invite Spitzer to address our membership. I watched as investment professionals fell all over themselves to shake Spitzer's hand, as if doing so somehow certified their high ethical standards. When Spitzer delivered his speech, he joked about indicting people in our profession. It became very evident to me that this man was focused more on promoting his career than he was in protecting investors from criminals. What goes around, comes around.