Wall Street faces an old threat with a new job

9 July 2013

4 minute read

Wall Street faces an old threat with a new job

Wall Street nemesis Eliot Spitzer’s new perch as New York City Comptroller gives the bank-bashing former AG who fell from grace as governor a new set of weapons – some more obvious than others.

Before he was fingered as "Client–9" for allegedly hiring a 22-year-old hooker, Spitzer slapped Wall Street’s biggest firms with a slew of lawsuits, shamed AIG’s Hank Greenberg on TV and pounced on NYSE CEO Dick Grasso's massive pay package.

Now, as the newly elected chief financial officer of New York City, Spitzer regains his authority to issue subpoenas, he gains unrivaled access to details of Wall Street salaries so he can cherry pick his targets and he takes control of the city's $140 billion in pension assets.

As Comptroller, Spitzer essentially becomes the portfolio manager of the behemoth city pension funds, which invest in many of the world’s biggest companies including financial giants.

And let’s not forget there’s already an army in place. With a high profile figure like Spitzer back in a powerful position, Wall Street will be hit from all angles.

Spitzer’s campaign will likely bolster the efforts of Larry Schloss, the city’s chief investment officer, who loathes that the city’s retirement system pays Wall Street money managers about $360 million a year. Schloss wants to take a lead from Canada and manage the mega money in-house.

Then there’s Benjamin M. Lawsky, New York’s superintendent of financial services, who is going after “shadow insurance” firms, claiming the nation’s biggest insurance companies are taking on too much risk at the expense of policyholders and taxpayers.

Watch out, Wall Street. Overcoming a sex scandal has only made Spitzer more stealth.

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