Former New York state attorney general Eliot Spitzer was arguably the most effective capitalist regulator we’ve ever seen.

During two terms in office, he became a regulatory giant killer, bringing Wall Street to heel on everything from independence of research to mutual fund market rigging, insurance company commissions and the ridiculous pay packet of New York Stock Exchange CEO Dick Grasso.

His phenomenal victories made a mockery of federal regulators and delivered him the state governorship.

Now, the aspiring Democrat Presidential candidate is political dead meat after The New York Times unearthed one of the great scoops – their governor’s engagement of a high price hook-r in Washington last month.

Not even the various philandering activities of John Major’s Tories after his “back to basics” pledge can beat this sort of hypocrisy.

Spitzer prided himself on cleaning up Wall Street, driving ethics in business and bringing a moral clarity to his job. Now he’s a sleazy law breaker who can’t even be trusted by his own family.

That said, the contrast between Spitzer’s regulatory achievements and that of our own corporate regulators are stark indeed. ASIC’s jail rate is falling fast with only 17 corporate crooks put in the slammer last year – the second lowest rate for a decade.

Chairman Tony D’Aloisio has talked tough when fronting Senate Estimates but his response during the recent credit crisis has been tame to say the least. Today’s instalment was this brief statement promising to make “inquiries” about trading in certain stocks.

Surely the corporate plod could at least name a few of these so-called victims of hedge funds and short selling such as ABC Learning, Challenger, Babcock, Macquarie, Asciano and Bendigo Bank. Besides, Alan Kohler produced this interesting piece in Business Spectator yesterday suggesting the whole short selling and stock lending conspiracy is a bit of a beat-up.

Last Thursday ASIC dipped its toes in the water with this statement effectively saying: “thou shall not spread false rumors”. And before that we had this tepid joint effort with the ASX re-affirming what the current rules require with short selling and stock lending.

If the Rudd government needed any more evidence that corporate regulation in Australia is a joke, they should check out this report about director share trading from governance advisory group Regnan. There are basically no rules and it is completely out of control.

I wouldn’t care how many hook-rs corporate governance minister Nick Sherry or ASIC chairman Tony D’Aloisio procured, it is time to get tough with corporate regulation, starting with stripping the ASX of its regulatory role to remove what has always been an untenable conflict of interest.

Check out this Mayne Report package on the WA News board fight.