A key aide to New York Attorney General Eliot Spitzer in his landmark investigation into conflicts of interests at Wall Street investment banks is moving to the other team.

Eric Dinallo, chief of the investment protection bureau for Spitzer, will become head of regulatory matters for

Morgan Stanley

(MWD)

, the investment bank said in a press release Thursday.

"Dinallo's appointment to this position underscores not only Morgan Stanley's commitment to regulatory compliance but to continuing to play a positive role in the shaping of public policy for the securities industry," said Philip Purcell, chief executive of Morgan Stanley, in the release.

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The news comes as Morgan Stanley is trying to shore up its reputation in the wake of the Spitzer probe, which found that research analysts' advice at several Wall Street firms was influenced by banking interests.

As part of a $1.4 billion settlement with 10 firms accused of issuing deceptive stock research in order to win over investment banking clients, Morgan Stanley agreed in April to pay $125 million.

The bank is separately the target of a

Securities and Exchange Commission

probe into its mutual fund sales practices. Spitzer and Massachusetts Secretary of the Commonwealth William Galvin are among those looking into the matter. The two officials are investigating whether or not Morgan Stanley pressured brokers to sell the firms' in-house mutual fund products at the expense of other funds.

Dinallo will start at Morgan Stanley on Sept. 8. Shares of the bank were lately off 4 cents at $48.48.