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A Post-Spitzer Wall Street

There could be a hitch in Wall Street's step this New Year's Eve. Yes, Eliot Spitzer is running for governor of New York. But the crusading prosecutor isn't ready to turn in his sheriff's badge just yet.

Spitzer, the New York attorney general, vows to continue chasing down wrongdoers in the securities and insurance industries for the next two years. This comes even as signs emerge that federal authorities are starting to hold their own at the same game.

"The SEC is getting more inquisitive and aggressive," the 45-year-old Democrat said in a recent interview. "Someone else will replace me, but for the next two years I'm pursuing this job just as diligently as the prior six."

For a brief moment, it appeared Spitzer had delivered a Christmas Day gift to Wall Street, when The New York Times reported Spitzer was planning to cede some of his turf to the Securities and Exchange Commission. But the gift turned to coal when Spitzer's office issued a press release repudiating much of the story, saying it's absurd to suggest he "has somehow altered his views on the role of his office in confronting corporate fraud."

Still, the question remains of what will happen to securities regulation in the absence of a man who has wrung more than $4 billion in fines and restitution from Wall Street.

For his part, Spitzer himself isn't worried about any regulatory vacuum if he moves onto the governor's mansion in Albany, especially now that the SEC is once again willing to show its teeth.

"I don't think there will be a void," he says. "There are a significant number of prosecutors doing the sort of cases we've been involved in."

But other observers don't see another regulator with Spitzer's tenacity coming along anytime soon, particularly to an attorney general's office that historically has spent more time rooting out consumer scams rather than Wall Street ones.

"If you are looking for headlines, there are easier ways to get them," says Jill Fisch, a securities professor at Fordham University School of Law. "You need someone not just with the appetite for the limelight but the knowledge and interest in pursuing something that is a substantively difficult area."

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