“New York Attorney General Eliot Spitzer was conducting serial meetings and munching on fruit when the wireless e-mailer on his belt began to beep. It was a text message from a staffer saying that Alliance Capital Management, one of the nation’s largest mutual-fund companies, had ‘something big’ to discuss,” writes Monica Langley in today’s Wall Street Journal.

“Seeking to end Mr. Spitzer’s investigation into its mutual-fund trading practices, Alliance last week told Mr. Spitzer that it would be willing to bow to an unusual demand: cut the annual fees it charges investors, according to people familiar with the talks. Mr. Spitzer’s probe had little to do with fees, but now they became the subject of talks between the attorney general and Alliance.”

“Alliance Capital Management Holding L.P. spokesman John Meyers declined to discuss the negotiations.”

” ‘Fees, fees, fees — that’s the big money,’ Mr. Spitzer crowed to his top lawyers after hearing from Alliance. ‘When we have a company in this position, we shouldn’t give up our leverage to negotiate about the issue that’s the 800-pound gorilla.’ “

“These days, Mr. Spitzer is the 800-pound gorilla, and his tactics often trigger controversy. Regulators at the Securities and Exchange Commission are arguing behind the scenes that Mr. Spitzer has no business telling fund companies how much to charge investors. Critics worry that in his quest to protect investors, Mr. Spitzer is acting more like a policy czar than a prosecutor. They say his approach to fees is akin to an inspector citing a butcher store for a slippery floor and demanding that the store lower its meat prices as a settlement.”

” ‘He’s showing an investing and voting public that he can be its champion and make companies shake in their boots,’ says Edward Fleischman, a former SEC commissioner. ” ‘But a prosecutor making policy can be dangerous if he becomes extortive.’ “

“The 44-year-old prosecutor has emerged as one of the toughest cops on the financial beat since the Depression, in the process changing the face of Wall Street regulation. In the past year, he marshaled a $1.4 billion settlement from 10 securities firms that he alleged had distributed misleading stock research to investors. Now he is leading an investigation into questionable trading practices by mutual-fund firms. The probe so far has ensnared more than two dozen financial firms. And his aggressiveness has pushed other financial regulators to take action against abuses.”

“His prosecutorial ambitions go beyond the financial world. He has begun investigating pharmaceutical pricing and variable annuities sold by the insurance industry. He also envisions a campaign against the Environmental Protection Agency, which recently relaxed air-quality regulations. ‘What we’re doing with the securities markets, we’ll do with the environment,’ Mr. Spitzer vowed in an interview.”

“Behind his growing clout is a bundle of contradictions. He has the ultimate insider’s wealthy upbringing and elite educational credentials. Yet he inherited an immigrant mentality from his father and professes an affinity for people without influence and money.”

” ‘On paper, he looks like an insider, but in practice, he acts like an outsider,’ says Jane Brady, Delaware’s attorney general, who adds that his effectiveness sometimes comes at the expense of collegiality and teamwork. ‘Eliot is a man of contradictions,’ she says, ‘and a loner willing to forge his own path.’ “