Bear Stearns on Wednesday joined rival Morgan Stanley in recruiting talent from the office of Eliot Spitzer when the U.S. investment bank hired Beth Golden, a deputy to the New York State attorney general, as global head of compliance.
There has long been a revolving door between investment banks and the government. For instance, Richard Lindsey, the head of the clearing business at Bear Stearns, worked at the U.S. Securities and Exchange.
But the door between the New York attorney general's office and Wall Street is starting to be used more frequently.
Morgan Stanley last year hired Eric Dinallo, Mr. Spitzer's former chief of the investment protection bureau, as head of regulatory matters. David Brown, a lawyer who joined the attorney general's office from Goldman Sachs, replaced Mr. Dinallo.
Wall Street's investment banks have come to know Mr. Spitzer's office intimately. The attorney general's office helped win a $1.4 billion research settlement with 10 banks last year. Ms Golden played an active role in the talks and Bear Stearns was one of the 10 banks that settled.
More recently, the attorney general's office and other regulators have worked with Wall Street on probes of mutual fund trading and sales abuses. Bear Stearns has also been a subject of that investigation.
These and other investigations have resulted in regulatory changes that have left Wall Street's leaders looking for people who can help them adhere to new rules.
Ms. Golden had worked at the New York State attorney general's office since 1999. Before working with Mr. Spitzer, she was in private practice, served as assistant U.S. attorney, and as an associate independent counsel on the Whitewater investigation.