Statement By Attorney General Eliot Spitzer Regarding The Need For Aggressive Action To Restore Investor Confidence

Almost every day there is a new scandal involving Wall Street and corporate America. This crisis of accountability is a major factor in the decline of the stock market and the inability of our economy to make a strong recovery.

In testimony before the Senate Consumer Affairs Subcommittee today, I described one element of the crisis - pervasive conflicts of interest involving stock analysts. I urged the Congress to consider national reforms modeled on the agreement my office reached recently with the Merrill Lynch.

The response from the members of the Senate panel was overwhelmingly positive. I am very grateful for the many comments in support of my efforts and those of other state regulators.

However, I was disappointed to learn that Congressman Michael G. Oxley, Chair of the House Financial Services Committee, continues to criticize the Merrill Lynch agreement and me personally. Mr. Oxley would have us believe that investors derive no protection from the vigilance of state authorities. He fails to recognize that were it not for my office's investigation and court filing, the extent of the conflict at Merrill Lynch would never have come to light.

Mr. Oxley simply does not understand that aggressive action is necessary to restore investor confidence. Instead, he seems intent on undercutting my efforts and those of other state regulators seeking to enforce state laws to protect consumers. His inaction and opposition to those who expose and seek to reform corporate wrongdoing contribute to the spiraling decline in public confidence.

My office will continue to investigate possible wrongdoing by brokerage firms. Our goal is to vigorously enforce state laws and serve as catalyst for national reform.

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