“Having run the first lap of his investigation of Wall Street research, Eliot L. Spitzer, attorney general of New York, secured $100 million in penalties from Merrill Lynch, changes to the way it compensates analysts to blunt the influence of investment bankers on them and an apology from the firm for the now-public frat-house chatter of its Internet analysts,” writes Gretchen Morgenson in today’s New York Times.

“Mr. Spitzer also produced yelps from Wall Street’s special friends in Washington, who argue that he has overreached in the investigation and settlement and threatens the nation’s capital markets, even its economy.”

“In a speech last Wednesday before the United States Chamber of Commerce, Representative Michael G. Oxley, a Republican from Ohio and chairman of the House Financial Services Committee, said: ‘By coercing large sums of money from brokerage firms, actions like those undertaken by the attorney general will seriously weaken the ability of American companies to raise funds in the capital markets.’ “

“American investors who lost funds in the capital markets clearly come second to Mr. Oxley. The large sum coerced out of Merrill — $100 million — is less than one-third of the amount the firm paid for office supplies and postage last year, $349 million.”

“It is no surprise that Mr. Spitzer is being dogged by Mr. Oxley, who has received $235,103 from political action committees tied to financial and insurance concerns this election cycle. That is 60 percent of his P.A.C. total and more than five times the receipts from his next-biggest industry donor.”

“Mr. Oxley and the others couch their attacks on Mr. Spitzer in these terms: state regulators should mind their own beeswax and let federal regulators finish the job on analyst conflicts.”

“The states are working with the Securities and Exchange Commission on the investigation of Wall Street conflicts. Trying to push them to the sidelines does a disservice to investors already battered by compliant accounting firms, conflicted analysts and corrupt corporate executives.”