Who Shot Wall Street's 'Sheriff'?

Eliot Spitzer earned plenty of antipathy in corporate America, making his resignation a happy day.
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New York Gov. Eliot Spitzer saw a meteoric rise to political prominence over a decade-long career in elected office, famously tackling malfeasance on Wall Street.

But along the way, the crusader for ethical rectitude, whose pursuit of corporate wrongdoing as a gun-slinging attorney general earned him the nickname the "Sheriff of Wall Street," racked up a string of high-powered enemies hungry for his political demise.

On Wednesday, the scandal-ridden governor gave his enemies some solace in announcing his resignation amid accusations he spent thousands of dollars soliciting pricey prostitutes.

On the floor of

NYSE Euronext's

(NYX)

New York Stock Exchange -- an organization where Spitzer famously railed against former Big Board chief Richard Grasso -- traders reportedly cheered when a humbled Spitzer formally announced his resignation.

"I'm deeply sorry that I did not live up to what was expected of me," Spitzer said diffidently during a midday news conference with his wife Silda standing at his side. He will be replaced, effective Monday, by Lt. Gov. David Paterson.

Spitzer is accused of arranging to meet a prostitute from the New York-based Emperors Club VIP during a trip to Washington, D.C. in mid-February, the day before Valentine's Day.

The Wall Street Journal

reported Spitzer had been holding off an official resignation while he negotiated with federal authorities to avoid prosecution in the case. Spitzer may have been in violation of the Mann Act, a federal law prohibiting the transportation of people across state lines for the purposes of prostitution.

So far no plea bargain has been struck that would prevent Spitzer from being charged with a crime for his sex scandal under the 1910 Mann Act. "There is no agreement between this office and Gov. Eliot Spitzer, relating to his resignation or any other matter," Michael Garcia, U.S. Attorney for the Southern District of New York, said in a public statement.

"He's hoisted on his own petard, what great irony," said analyst Peter Cohan of Peter A. Cohan Associates, which covers financial firms. "Part of me is thinking, he did himself in. Frankly, why does somebody think that they are going to get away with this? I can't understand how somebody who has a lot of brainpower was missing something in terms of common sense."

Spitzer's political downfall reads like so many Shakespearian tragedies.

Raised in the Riverdale section of the Bronx, Spitzer attended Princeton University and reportedly scored a near-perfect 1590 on his SAT college entrance exam. Spitzer also earned a perfect score on his LSAT exam prior to attending Harvard Law School, where he was an editor of the university's law review.

As a prosecutor, Spitzer publicly espoused a lofty ethical code, threatening Wall Street execs with lawsuits and irreparable reputational damage, only to be upended by his own high standards in career-ending fashion.

Spitzer's manifold enemies, including Grasso,

Citigroup's

(C) - Get Report

former CEO Sandy Weill, ex-

American International Group's

(AIG) - Get Report

CEO Maurice Greenberg, could not have written a better script.

The New York Post

reported on Wednesday that Spitzer had spent up to $80,000 on prostitutes and had brought attention to his actions by trying to mask the amounts and other information to avoid detection.

The New York Times

reported Spitzer's bank had to file "suspicious activity reports" with the Internal Revenue Service after the governor kept transactions small and attempted to remove his name.

Still, scuttlebutt on the Street would not let go of the notion one of Spitzer's many enemies may have played a role in bringing the case to light. It's hard to say, but what is clear is some of the hardest-hitting, well-heeled power players in and outside of Wall Street had revenge on the brain for years.

Those same players would have been happy to spotlight the activity of a high-profile governor whose alleged improprieties might only be equaled by his dubious judgment in targeting prostitutes with his enemies still smarting from his vitriolic attacks.

Kenneth Langone, the

Home Depot

(HD) - Get Report

founder and former Big Board director, is one of the many that fell under the Spitzer steamroller.

As attorney general, Spitzer charged Langone with misleading directors about a $187 million severance package pocketed by Grasso when he left the organization. "He destroyed reputations of people who had good reputations and deserved reputations," Langone told

CNBC

on Tuesday, after hearing about Spitzer's alleged dalliances.

Hypocrisy is not a criminal offense, and many of those reveling in Spitzer's sorry situation do not have skeleton-free closets. But the fact of the matter is that Spitzer publicly portrayed a pristine image, while behind closed doors allegedly lived a lifestyle at odds with standards he upheld.

"We all have our private hell. I hope his private hell is hotter than anybody else's," Langone continued.

Known for hardball tactics and lobbing threatening calls to power players from Langone to former

Goldman Sachs

(GS) - Get Report

Chairman John Whitehead, it seemed only a matter of time before Spitzer got his comeuppance.

Spitzer seemed to always live a life above the fray and in some ways must have viewed himself as better than the people he sought to prosecute as attorney general and preside over as governor.

Edgar Allan Poe, in a macabre tale titled

Cask of the Amontillado

, highlights a Latin phrase,

Nemo me impune lacessit

that best describes Wall Street's ultimate take on Spitzer's fall: "No one touches me with impunity," the phrase translates.

Note:

To see a mini-list of Spitzer's well-known targets, check out the

The Eliot Spitzer Revenge Portfolio

at Stocikpickr.com. In addition to NYSE Euronext, and AIG, the list includes

Citigroup

(C) - Get Report

,

Merrill Lynch

(MER)

and

Martha Stewart Living Omnimedia

(MSO)

, among others.