Merrill Slides on Worries the Feds Are Coming

Investment bank and brokerage firm

Merrill Lynch

(MER)

fell Wednesday after New York Attorney General Eliot Spitzer said federal regulators have contacted his office for information on the conflicts of interest said to exist at various Wall Street firms.

Merrill's Internet group was named specifically in

a recent investigation by Spitzer's office. Following the probe, Merrill

changed its disclosure policy in order to give investors more information about its banking relationship with companies covered by research reports.

According to published reports on Tuesday, the Justice Department said it would take a look at allegations of conflicts of interest between the research departments and investment banking divisions at some firms. A spokesman for the department indicated to

TheStreet.com

that there was no specific investigation under way.

Merrill closed down $2.49, or 5.3%, at $44.65. Shares of other big investment banks, including

Bear Stearns

(BSC)

,

Goldman Sachs

(GS) - Get Report

,

J.P. Morgan Chase

(JPM) - Get Report

,

Lehman Brothers

(LEH)

and

Morgan Stanley

(MWD)

, also finished lower.