The Eliot Spitzer Scandal Stock Portfolio

First off, this is not an article about New York Gov. Eliot Spitzer's troubles today. He has allegations to contend with and a family to make amends with.

Nevertheless, it's worth looking at the companies and stocks that Spitzer has literally torn apart over the past several years during his tenure as New York State's Attorney General. These companies were brutalized in the courts and had to spend hundreds of millions of dollars defending themselves, regardless of eventual guilt or innocence. Some careers were lost or forever changed. Fortunes were gained betting against these companies.

Perhaps now, fortunes will be gained betting on these companies hitting the comeback trail.

• AIG (AIG): Hank Greenberg lost his job and reputation when Spitzer refused to even deal with AIG unless he was removed as chairman and CEO.
• Marsh & McLennan (MMC): At this firm, Hank's son, Jeffrey Greenberg, was also axed from the chef executive role and replaced by Spitzer-recommended Mike Cherkasky.
• Citigroup (C): Sandy Weill was axed when Spitzer made a run against Salomon Smith Barney telecom analyst Jack Grubman for Grubman's increased bullishness on Worldcom right when Worldcom was benefiting from extreme fraud. Weill was buddies with AT&T Chairman Michael Armstrong.
• Merrill Lynch (MER): Spitzer went against the investment banking firm's research outfit after among other things, uncovering emails such as Henry Blodget's famous "Let's put lipstick on this pig" email referring to a stock Blodget was supposedly recommending for the firm.
• NYSE Euronext (NYX): The New York Stock Exchange wasn't public then, but Spitzer went all out against Dick Grasso's large compensation package, which exceeded $100 million, when he was chief.
• Martha Stewart Living Omnimedia (MSO): This media giant came under Spitzer's fire as well.

Most of these companies have been on the comeback trail ever since but have never fully recovered from the hurdles that Spitzer put them through. Regardless of his political issues right now, and whether or not the cases were substantial against these companies, the spotlight could very well return to them. They may be worth watching for some type of comeback here.

Check out The Eliot Spitzer Revenge portfolio at Stockpickr.com.

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