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New York Attorney General Eliot Spitzer has been reading a lot of e-mail lately — most notably messages written by stock market analysts who trashed companies, but went ahead and recommended them to investors. The e-mail was key in several investigations launched into Wall Street practices and provided the basis for major changes at investment banks to ensure analyst independence. They also gave Spitzer some great joke fodder. When Spitzer greeted a group of analysts at a luncheon a year ago, he quipped, “It’s nice to put faces to e-mails.” Spitzer recalls that the analysts let loose a nervous titter and then looked down at their plates. Apparently he hasn’t had time to write any new material. Last week, at a San Francisco meeting of white-collar criminal defense lawyers, he retold the joke. But this time, he wasn’t playing such a tough room. The defense lawyers howled, much to Spitzer’s apparent delight. The Empire State AG — a Democratic up-and-comer who spoke at an American Bar Association meeting in San Francisco — admitted he was anticipating a better response from defense lawyers because he’s been so good for their business. The lawyers laughed again, but not quite as much. Spitzer grabbed the national spotlight by stepping in to investigate Wall Street practices and leading technology investment banker Frank Quattrone, which put him in direct competition with the U.S. attorney in Manhattan. E-mail played a prominent role in the investigations of Quattrone. But Spitzer, a state government official, defended his decision to push into federal territory. “There’s been an intentional void at the federal level,” Spitzer said. “Every other chain in the corporate governance process failed to live up to its mandates,” Spitzer said, blaming executives, boards of directors, accountants and lawyers for the excesses of the Internet boom. Spitzer is clearly still peeved at federal agencies, which he accused of trying to sidestep efforts by state attorneys general to enforce state law when they were closely aligned with federal laws. He targeted the Office of the Comptroller of the Currency for trying to derail some of the initiatives New York and other states had undertaken. For one thing, Spitzer complained the OCC had tried to thwart his successful efforts to convince credit card companies to stop handling online gambling transactions. Spitzer was clearly stumping for his next election — which pundits speculate could take him to the New York governor’s mansion — but he didn’t completely forget his audience of white-collar criminal defense lawyers. He suggested that as a group they not try to sidestep the states the way some of the federal agencies have tried to do. In particular, he said lawyers should avoid asking Congress to rein in state enforcers because it wasn’t a smart political battle. He said the public is paying attention and knows that state attorneys general are at the forefront of efforts to curb Wall Street excesses. “Faith in the self-regulatory model may have been misplaced,” he said.

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