Following the decision to drop his dubious prosecution (or was that persecution) of Theodore Siphol in regard to alleged improper trading of mutual funds (here, here, here and here), New York Attorney General Eliot Spitzer dropped similar fraud and larceny charges against Paul Flynn, a former executive at Canadian Imperial Bank of Commerce who had been accused of aiding hedge funds in improper mutual-fund trading.
Interestingly, spokespersons in Mr. Spitzer’s office defended the decision to drop the charges against Mr. Flynn on the grounds that his indictment on criminal charges was merely a small part of the better good — i.e., the Lord of Regulation’s campaign to overhaul the mutual fund industry and extract over $3 billion in fines, restitution and fee cuts from those evil capitalist roaders. Besides, nine of the 11 people facing criminal charges from Spitzer’s office related to the improper trading had pleaded guilty, so that’s a pretty good batting average. Don’t need to get greedy in chocking up another one against Mr. Flynn.
H’mm. Sounds to me as if Mr. Spitzer is using the criminal justice system to extort settlements from companies and individual defendants through headline-grabbing threats of business destruction and prison time. Plus, the publicity from these public crusades is cheap advertising for the “Spitzer for Governor” campaign.
Isn’t such conduct more deserving of a criminal investigation than many of the matters that Spitzer pursues?
By the way, this Peter Elkind puff piece in the current edition of Fortune magazine at least provides some interesting personal background on Mr. Spitzer. Mr. Elkind is a co-author of Smartest Guys in the Room about the Enron scandal. Hat tip to Adam Shpeen for the link to the Spitzer article.