Securities lawyers say the string of courtroom defeats could make defendants in other cases unwilling to settle as fast as they did in the mutual fund trading investigation and the Wall Street conflicts-of-interest probe.
A sense that Spitzer may be off his game explains why his office has been relatively quiet on the regulatory front, after filing a civil suit in May against American International Group (AIG) and Maurice Greenberg, the longtime AIG executive and insurance industry titan.
In fact, after filing the civil suit against AIG and Greenberg, Spitzer's prosecutors have taken a low-key approach in the ongoing criminal investigation into accounting irregularities at the giant insurer. People familiar with the investigation say Spitzer has taken an uncharacteristic back seat to federal prosecutors in the criminal inquiry.
"Spitzer right now is very gun-shy to bring a case unless he considers it to be a slam-dunk,'' says Zamansky.