Redesigning Financial Regulation (PDF)

At the height of the 1990s boom, Jack Grubman, one of the most
successful analysts in Wall Street proclaimed 'what used to
be conflicts of interest are now synergies'. This myopia
contributed dramatically to the elevation of a culture in which
greed was deified, oversight denigrated and misfeasance justified.
Since the fall of the markets and the implosion of confidence in
the American corporate business model, one man has proved
instrumental in deconstructing the rhetoric of the 1990s: Eliot
Spitzer, the combative Attorney General of New York. In the
process, his innovative application of state law has reconfigured
the governance of Wall Street.

Over the past three years the pursuit of transparency and
accountability in the structure of the markets has propelled
Spitzer to the forefront of regulatory policy. His investigations
into tainted analyst research, the mutual funds industry, the
governance of the New York Stock Exchange and the insurance
industry have focused attention not just on corrupted individuals
but also the complicity of the financial structure itself. Spitzer
exploited the inherent conflicts of interest to the full, forcing
regulators to adopt a much more proactive approach and creating a
national platform for his own wider political ambitions. Now
holding the Democratic nomination for the Governorship of New York,
Spitzer has begun a path for higher national office.

This groundbreaking book features exclusive access with many of
the key actors in these changes to the governance of Wall Street.
It examines how Eliot Spitzer exploited gaps in the regulatory
framework to capture the corporate reform agenda and explores the
implications of his actions on policy formation and
recalibration.

Key incidents include: changing the terms of reference governing
analyst research; the defenestration of Dick Grasso's tenure
over the NYSE (which is now being heard in state court in New
York); and the battles for control between the former Chairman of
the Securities Exchange Commission, Harvey Pitt, and Spitzer.

The book details not only the contested, contingent and
interdependent connections between the American political and
financial systems but reveals how Spitzer's manipulation of
those connections have proved instrumental in enhancing his own
wider political ambitions.