March 12, 2008 / 6:44 PM / 12 years ago

Traders stop to watch Spitzer fall on his sword

NEW YORK (Reuters) - Trading desks across the United States stopped on Wednesday to watch the resignation speech of New York Gov. Eliot Spitzer, fascinated by the downfall of the man who built a career on investigating Wall Street crimes.

New York Governor Eliot Spitzer (R) stands next to his wife Silda Wall Spitzer as he announces his resignation at his office in New York March 12, 2008. Spitzer faced pressure to quit since it was reported earlier in the week that he was caught on a federal wiretap arranging to meet with a prostitute at a Washington hotel last month. REUTERS/Brendan McDermid

Spitzer had faced growing pressure to quit after The New York Times reported on Monday that he was caught on a federal wiretap arranging to meet a prostitute at a Washington, D.C., hotel last month.

At around 11:45 a.m. EDT on Wednesday in New York, Spitzer finally resigned, with traders across the country agog.

“This is bigger than (Fed Chairman Ben) Bernanke, bigger than oil, and it may be even bigger than the Super Bowl,” said Brian Taylor, head currency trader at M&T Bank in Buffalo, New York.

“Everybody is glued to their desks. No one has made as many enemies on Wall Street as Spitzer did — The Street is loving it and I wouldn’t be surprised to hear a big cheer throughout the trading desk when he goes,” Taylor added.

Spitzer, 48 and married, is a former New York State chief prosecutor who built his reputation investigating financial crime on Wall Street and probed prostitution rings.

“He’s had such a big impact on Wall Street over the past decade that desks are following this story like it’s Anna Nicole Smith or O.J. Simpson in the courtroom,” said Edward Bretschger, director, equity sales and trading, at Calyon Securities in New York.


In a statement that dwelled on his remorse for “private failings,” Spitzer said Lt. Gov. David Paterson will replace him next Monday, but made no specific reference to the allegations surrounding him.

“I am deeply sorry that I did not live up to what was expected of me. To every New Yorker and to all those who believed in what I tried to stand for, I sincerely apologize,” Spitzer said.”

Spitzer, who attracted wide publicity but also resentment on Wall Street with his pursuit of financial crimes while he was the state’s attorney general, became governor with nearly 70 percent of the vote in November 2006 on pledges to clean up state politics.

Even outside of New York, Spitzer’s downfall was followed with intense interest.

“Every desk stopped to listen to the story,” said Warren West, head trader at Greentree Brokerage Services Inc. in Philadelphia. “He definitely lived in the media so it is very fitting that he dies there too.”

In the Midwest, fund managers and traders were also preoccupied with their televisions.

“Everyone stopped,” said Mirko Mikelic, portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan.

“After months of just being hammered by all the bad news in the fixed income market, it is actually a welcome distraction.”

Additional reporting by Kristina Cooke, Jennifer Ablan, Vivianne Rodrigues, Caroline Valetkevitch, Ellis Mnyandu and Justin Grant; Editing by Maureen Bavdek

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