Spitzer Tied to Prostitution Ring

Updated from 3:51 p.m. EDT

New York Gov. Eliot Spitzer, who pressed hard for reform on Wall Street before he was elected, has been recorded making a telephone call to arrange a meeting with a prostitute in the nation's capital, according to a published report.

The report, which appeared in The New York Times and cited a person familiar with the matter, said Spitzer was recorded during a federal investigation into a prostitution ring. The man on the call was identified as "Client 9," who was in fact Spitzer, according to the person the newspaper cited.

On the call, the man was heard making plans to have a woman go from New York to Washington, D.C., in order to meet in a hotel room on the night of Feb. 13, the report said. Spitzer traveled to Washington that evening, the report added.

The next day, he appeared before legislators at a hearing on the troubles of bond insurers Ambac Financial (ABK Quote - Cramer on ABK - Stock Picks), MBIA (MBI Quote - Cramer on MBI - Stock Picks) and Financial Guaranty Insurance Co.

Earlier, The Times, citing a source in Albany, broke the story that Spitzer had told senior officials in his administration that he was involved in a prostitution ring.

New York Gov. Eliot Spitzer at brief news conference Monday in New York after allegations arose that he had attempted to arrange a meeting with a prostitute.

Following the report, Spitzer made a brief announcement at a press conference, saying he had "failed to live up to the standard that I expected of myself." He apologized to the public and his family for his actions, but he didn't make any reference to a prostitution operation.

Fox News subsequently reported that Spitzer is expected to resign. During Spitzer's comments, however, he didn't say he was stepping down. "I must now dedicate some time to regain the trust of my family," he said. His wife Silda was with him as he delivered his remarks.

Should Spitzer leave office, his post would be filled by Lt. Gov. David Paterson.

Spitzer, a Democrat who has three children, is in his first term. He was previously the state's attorney general. During that time, he rose to prominence for pursing allegations of corruption and greed in corporate America, holding himself up as the champion of the retail investor.

Among the companies Spitzer pursued were some of the biggest securities firms in the world, including Merrill Lynch (MER Quote - Cramer on MER - Stock Picks), Morgan Stanley (MS Quote - Cramer on MS - Stock Picks), Goldman Sachs (GS Quote - Cramer on GS - Stock Picks) and Bear Stearns (BSC Quote - Cramer on BSC - Stock Picks), mutual fund houses Fidelity and Franklin Resources (BEN Quote - Cramer on BEN - Stock Picks), and insurance broker Marsh & McLennan (MMC Quote - Cramer on MMC - Stock Picks).

The New York Sun reported earlier that prosecutors specializing in public corruption were leading an investigation into a prostitution service that charged up to $5,500 an hour. That those type of prosecutors were dealing with the case suggested the involvement of a public official, the paper reported.