By Jonathan Stempel
NEW YORK (Reuters) - New York State Attorney General Eliot Spitzer may be readying one more high-profile enforcement action against a major Wall Street firm before he leaves office to become governor, his investment protection chief said on Tuesday.
David Brown, who with Spitzer has extracted about $7 billion in fines and restitution from the U.S. mutual fund and insurance industries, also said more settlements with companies are possible before Spitzer becomes governor in January.
Speaking at the Reuters Investment Banking Summit in New York, Brown said he is considering whether to pursue two new cases this year.
"I have one that is new and in the retirement space ... I'm talking about retirement products and costs that go into it," Brown said. "The other is really a bread-and-butter securities case that is on what I think is a new topic."
Asked whether the latter involves a "name-brand" Wall Street firm, Brown said: "Yes." He declined to elaborate.
In one existing retirement case, Spitzer in March sued tax preparer H&R Block Inc. (HRB.N: Quote, Profile, Research, Stock Buzz) over what he called excessive fees on its Express IRA retirement accounts. H&R Block has denied wrongdoing.
Spitzer engineered the April 2003 settlement in which 10 Wall Street firms agreed to pay $1.4 billion to settle charges that they issued biased equity research to win investment banking business. Citigroup Inc. (C.N: Quote, Profile, Research, Stock Buzz) paid the most, $400 million.
Brown, who joined Spitzer's office in May 2003, and the attorney general have extracted about $4 billion from probes into improper or illegal mutual fund trading, and about $3 billion from probes into insurance bid-rigging. Continued...
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