April 28, 2010 / 6:28 PM / 9 years ago

Spitzer says Wall Street reform needed

Former New York governor Eliot Spitzer speaks at the Reuters Global Financial Regulation Summit 2010 in New York April 28, 2010. REUTERS/Brendan McDermid

WASHINGTON (Reuters) - Former New York Governor Eliot Spitzer said Wall Street’s business model was flawed and structural reforms were more important than bringing criminal or civil actions against individuals.

But the one-time attorney general of New York also said that, depending on the evidence, criminal or civil actions should be brought against Wall Street figures who knowingly misled investors.

Spitzer cautioned against holding mid-level workers criminally culpable without also holding their superiors responsible.

“There are a lot of cases that could be brought at the lower levels with misrepresentations in the actual issuance of debt,” Spitzer told the Reuters Global Financial Regulation Summit on Wednesday.

“It gets harder and harder as you go up a tree to prove knowingly misleading comments because there’s greater distance between the actual activity and senior executives” who embraced the firm’s business model, he said.

Spitzer said that Wall Street banks had come to play so many different roles with so many different people “that nobody knows to whom they owe a duty of loyalty.”

He called that business model “flawed” and said that structural reform was the key to preventing another financial meltdown.

Reporting by Dan Margolies; Editing by Tim Dobbyn

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