By Tim McLaughlin and Karen Freifeld
NEW YORK (Reuters) - New York Attorney General Eric Schneiderman, long seen as a secondary force in policing Wall Street banks, is taking the lead in what may be the most ambitious case of his career: accusing Barclays Plc
By making a case against the bank, Schneiderman has seized a lead role in a contentious dispute about whether high-frequency traders have turned the stock market into a rigged game that hurts regular investors.
The case against Barclays could lead to investigations into other Wall Street banks and define Schneiderman's career as an attorney general, lawyers say.
"It is the most important attack on practices in the market that any AG has engaged in a while," said John Moscow, a former Manhattan prosecutor who now handles white-collar defense cases.
Barclays spokesman Mark Lane declined to comment on Friday.
A former state senator and corporate lawyer, Schneiderman is following a well worn path for New York attorney generals - taking on Wall Street and potentially winning political capital - and could end up, like Eliot Spitzer and Andrew Cuomo before him, as the state's governor. He declined to comment for this story.
Schneiderman, 59, graduated from Amherst College and earned a Harvard Law degree in 1982. He spent 15 years in corporate law, including as a partner at Kirkpatrick & Lockhart, where he handled white-collar defense cases. He served six terms as a state senator before running for attorney general, taking that office in 20ll.
Early in his tenure, Schneiderman was knocked for seeming more like the state legislator he used to be than a prosecutor. He has been less adept at grabbing headlines than Spitzer or Cuomo, and while he may have held banks accountable, he was less likely to push out ahead with cases.
In 2011, in his first year as attorney general, Schneiderman accused BNY Mellon Corp
He is co-chair of a state-federal task force that in 2013 settled with JPMorgan Chase & Co
In contrast, Spitzer busted Wall Street with a $1.4 billion settlement with big banks and brokerages for urging customers to buy stocks that their analysts privately said were junk. Cuomo led a nationwide investigation into the auction-rate securities market, uncovering how the investments were marketed as safe when in reality they faced increasing liquidity risk. His investigation resulted in more than $60 billion in investor buybacks.
People close to Schneiderman characterize him as patient and low-key. While Spitzer runs in Central Park in his free time and Cuomo rides a Harley Davidson motorcycle, Schneiderman practices yoga.
But lawyers say that banks should not be fooled by Schneiderman's demeanor. He carries a big stick, namely the Martin Act, a New York state securities law that is powerful for prosecutors because it often does not require proof of intent to deceive. Some lawyers have criticized the law as too broad, with some saying it has been superseded by federal law.
"Another bank will pay enormous fines under a law that, in my mind, no longer exists,” said defense lawyer Robert McTamaney, a critic of the law, referring to the Barclays case.
(Reporting By Tim McLaughlin and Karen Freifeld; Editing by Dan Wilchins and Frances Kerry)