Former political pariah Eliot Spitzer has made headlines recently with his re-emergence into the public-service arena. Spitzer initially gained notoriety as the attorney general of New York, a position that gave him the nickname “The Sheriff of Wall Street.” Now running for state comptroller, a role that includes overseeing the New York’s $139 billion pension funds, Spitzer vows to resume his hard-line stance on public companies. The politician has already proved he isn’t afraid of going after big-name financial institutions, and he has a record of chasing down fraudsters of all shapes and sizes. When it comes to your investments, are you worried about the second coming of The Sheriff of Wall Street?
Before Eliot Spitzer’s fall from grace as New York governor in 2008, he had maintained a strong reputation as a statesman. As attorney general, Spitzer brought the 1921 Martin Act back to life. The Martin Act is a New York piece of legislation that gives power to the attorney general to chase down financial frauds. It’s the only law of its kind among the 50 states.
Using the law and his powers as attorney general, Spitzer hunted down the likes of Hank Greenberg, the former chief of American International Group, Inc. (NYSE:AIG). Alleging that Greenberg misled investors as to the financial health of the world’s largest insurer, Spitzer eventually forced the CEO to resign in 2005. As the world found out just a couple of years later, Spitzer may have been on to something in suing Greenberg for fraud. Even after his time as attorney general and governor, Spitzer continued to lambast Greenberg and American International Group, Inc. (NYSE:AIG)’s actions in writing his 2009 editorial in Slate. In what appears to be an act of vengeance, Greenberg has just now opened a lawsuit against Spitzer (announced one day after Spitzer’s name was added to the ballot) on grounds of defamation.
For American International Group, Inc. (NYSE:AIG) and its investors, the potential return of Spitzer likely isn’t anything to stress over. For one, American International Group, Inc. (NYSE:AIG) has rebounded wonderfully from its financial-crisis lows. The company has a much stronger balance sheet and maintains a more positive view in the eye of both Streets — Wall and Main.
Furthermore, Spitzer as comptroller would not meaningfully threaten public companies or their investors.