Spitzer’s Settlement Two Years On

Eliot Spitzer made quite a name for himself taking on Wall Street. Two years ago, he forced the biggest firms on Wall Street into a global settlement due to conflicts of interest between research and investment banking. The firms had to pay over $1.4 billion. The money was supposed to go to investor education, independent research and investors who were harmed. Instead, it’s turned into a money grab among competing federal and government agencies.

Most of the $413 million that went to the states, based on population, went to help balance state budgets (or close big gaps). California had the largest share–$43 million. It put $40 million into its general fund and reserved $3 million for investor education. So far, it has spent $150,000 on a campaign to teach military personnel and their families how to avoid financial scam artists. The worst abuse was in Georgia. The state spent $4.3 million on public service announcements featuring Secretary of State Cathy Cox, who just so happens to be running for governor. The ads ran all over the state. Also, the independent research isn’t working out well either.

Posted by on August 30th, 2005 at 12:04 pm


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