UPDATE 6-NY Gov. Spitzer linked to prostitute -report

(Adds background, change in Spitzer's schedule)

By Daniel Trotta and Robert Campbell

NEW YORK, March 10 (Reuters) - New York Gov. Eliot Spitzer, the one-time "Sheriff" of Wall Street who campaigned on a promise to clean up state politics, was embroiled in a sex scandal on Monday that threatened to force his resignation.

A New York Times report linked him to a $1,000-an-hour prostitute, saying he was caught on a federal wiretap at least six times on Feb. 12 and 13 arranging to meet with her at a Washington hotel last month.

The Times said he was the man described in court papers as Client 9 who patronized the Emperors Club, which federal investigators allege was a prostitution ring whose most expensive professionals charged more than $5,500 an hour.

Spitzer, a married 48-year-old Democrat who investigated prostitution as New York's attorney general, apologized for what he described as "private matter" but said nothing about resigning. Some media reports said he would quit and some state Republicans called for him to step down.

CBS 2 television in New York, citing unidentified sources, said Spitzer could resign as early as Monday night.

"I have acted in a way that violated the obligations to my family and that violates my -- or any -- sense of right and wrong. I apologize first, and most importantly, to my family. I apologize to the public whom I promised better," the father of three daughters told a packed room of reporters in New York City with his wife, Silda Wall Spitzer, at his side.

"I am disappointed that I failed to live up to the standard that I expect of myself. I must now dedicate some time to regain the trust of my family," Spitzer added.

The news rocked Wall Street, where power brokers resented Spitzer's high-profile inquiries into financial cases when he was New York state's chief prosecutor, and sent shockwaves through the Democratic Party.

"Get ready for a schadenfreude festival on Wall Street," said Barry Ritholtz, director of equity research at Fusion IQ.

Spitzer has been described a rising star in the party and is pledged to support Democratic presidential candidate Sen. Hillary Clinton of New York as a superdelegate at the Democratic Party convention in August.

As state attorney general before being elected governor in November 2006, Spitzer built his reputation going after white-collar crime on Wall Street. As governor, he vowed to clean up state politics.

FORMER 'CRUSADER OF THE YEAR'

Time Magazine named him "Crusader of the Year" in 2002 after his landmark settlement with 10 of the country's largest securities firms over charges of misleading investors.

The New York Times, citing an administration official, reported that Spitzer had told his top administration officials he had been involved in a prostitution ring that had been under investigation by federal authorities.