NEW YORK - New York State's top regulator, Eliot Spitzer, took a short break from stamping out mutual fund abuses earlier this month, long enough to raise $2 million at a fundraiser as the attorney general eyes a bid for governor.

A distinguished list of more than 700 New Yorkers showed up for a luncheon at The Sheraton New York Hotel to honor Spitzer and begin stockpiling his war chest. The star-studded affair featured the likes of tennis great John McEnroe, Hollywood producer Harvey Weinstein, actress Bernadette Peters, Cablevision chief James Dolan and Yes Network head Leo Hindery. Admission to the gala ranged from $1,000 to $2,500 a plate.

Spitzer has built a strong reputation for his relentless pursuit of improprieties on Wall Street, a crusade that yielded last year's $1.4 billion settlement with investment banking and brokerage firms for faulty stock research. Now he has the $7 trillion mutual fund industry in his crosshairs for fleecing investors through a series of market timing and late trading arrangements along with charging excessive fees.

While the day's mood was predominantly lighthearted, Spitzer took a few minutes to address the widening mutual fund scandal. He characterized the current problems in the mutual fund industry as an "uncomfortable intersection between small investors and large institutions." He also added that his office will do its best to ensure that fund shareholders don't bear the cost of settlements with his office.

Spitzer declined to comment on his political future but the consensus among attendees was that he will run for governor of New York in 2006. Despite his silence on the issue, the centerpiece at each table sported tennis balls with the slogan "Spitzer 2006" printed on them. And as he made his way offstage, the speakers blared Bruce Springsteen's classic hit "Born to Run."

When asked later if his investigations of Wall Street firms would hinder his political aspirations, Spitzer said: "The notion that the financial services community won't support someone who wants to clean up the market is wrong."

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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