The Wall Street executive whose tip triggered the mutual fund investigation says she stepped forward because she was worried that small investors were being hurt – but had no idea so many companieswere tainted by improper trading.

“What made me come forward was a conversation with my sister, who said she might never be able to retire” because of losses in her 401(k) account, Noreen Harrington, 47, of Manhattan said Tuesday. “I’m a bit overwhelmed with what happened. I’m a Wall Street veteran and I had no idea that the problems were so widespread.”

Harrington helped manage investments at Stern Asset Management.

New York Attorney General Eliot Spitzer’s office confirmed Harrington’s role Tuesday, saying it was her phone call this past May that laid the foundation for charges of securities law violations against Canary Capital LLC. In September, the hedge fund operator agreed to pay $40 million to settle the charges.

The case was the catalyst for a much broader investigation that has since expanded into dozens of subpoenas and accusations of wrongdoing by fund companies ranging from Putnam Investments to the Pilgrim Baxter fund family. Other companies, including Strong Financial and Alliance Capital Management, have acknowledged improper trading occurred, but not been charged.

Harrington had worked from 2001 to 2002 at Stern Asset Management, a division of the Stern family’s Hartz Group. Although she did not work at Canary, which was managed by Edward Stern, she had heard traders discussing arrangements that allowed the hedge fund to make after-hours mutual fund trades, which are illegal.

She called Spitzer’s office in May 2003, nearly a year after she had left Stern Asset Management. She said her motive was purely to help small investors, and had nothing to do with her departure from the company. Efforts to get comment from the Hartz Group about the departure and Harrington’s employment were not immediately successful.

Harrington said she was initially reluctant to give investigators specifics. She eventually changed her mind, though, and talked to investigators “a couple of times” on the phone and had two meetings. Her involvement ended by June.

She said she went to Spitzer because of his earlier investigation into analyst and other abuses at big Wall Street firms that had resulted in a $1.4 billion settlement.

“I just kept thinking about the individual investors,” she said. “I believe I did the right thing.”

Harrington’s identity was revealed by reporters at The Wall Street Journal and The New York Times. Had they not found her, Harrington said, she probably would have been content for her name to remain a secret. Until this week, she said, most of her friends and family were unaware of her involvement.

In an e-mail statement Tuesday, Spitzer said Harrington’s “gutsy decision to step forward helped start a process that will ultimately help millions of investors.”

Harrington, whose previous employers also include Goldman Sachs, is now trying to start her own hedge fund. She knows her whistle-blowing will get a mixed reaction from Wall Street.

“Obviously, some doors will close, but maybe some others will open,” she said. “There are people out there who believe we should put investors’ interests first. Either way, though, I did what I did.”

The Wall Street executive whose tip triggered the mutual fund investigation says she stepped forward because she was worried that small investors were being hurt – but had no idea so many companieswere tainted by improper trading.

“What made me come forward was a conversation with my sister, who said she might never be able to retire” because of losses in her 401(k) account, Noreen Harrington, 47, of Manhattan said Tuesday. “I’m a bit overwhelmed with what happened. I’m a Wall Street veteran and I had no idea that the problems were so widespread.”

Harrington helped manage investments at Stern Asset Management.

New York Attorney General Eliot Spitzer’s office confirmed Harrington’s role Tuesday, saying it was her phone call this past May that laid the foundation for charges of securities law violations against Canary Capital LLC. In September, the hedge fund operator agreed to pay $40 million to settle the charges.

The case was the catalyst for a much broader investigation that has since expanded into dozens of subpoenas and accusations of wrongdoing by fund companies ranging from Putnam Investments to the Pilgrim Baxter fund family. Other companies, including Strong Financial and Alliance Capital Management, have acknowledged improper trading occurred, but not been charged.

Harrington had worked from 2001 to 2002 at Stern Asset Management, a division of the Stern family’s Hartz Group. Although she did not work at Canary, which was managed by Edward Stern, she had heard traders discussing arrangements that allowed the hedge fund to make after-hours mutual fund trades, which are illegal.

She called Spitzer’s office in May 2003, nearly a year after she had left Stern Asset Management. She said her motive was purely to help small investors, and had nothing to do with her departure from the company. Efforts to get comment from the Hartz Group about the departure and Harrington’s employment were not immediately successful.

Harrington said she was initially reluctant to give investigators specifics. She eventually changed her mind, though, and talked to investigators “a couple of times” on the phone and had two meetings. Her involvement ended by June.

She said she went to Spitzer because of his earlier investigation into analyst and other abuses at big Wall Street firms that had resulted in a $1.4 billion settlement.

“I just kept thinking about the individual investors,” she said. “I believe I did the right thing.”

Harrington’s identity was revealed by reporters at The Wall Street Journal and The New York Times. Had they not found her, Harrington said, she probably would have been content for her name to remain a secret. Until this week, she said, most of her friends and family were unaware of her involvement.

In an e-mail statement Tuesday, Spitzer said Harrington’s “gutsy decision to step forward helped start a process that will ultimately help millions of investors.”

Harrington, whose previous employers also include Goldman Sachs, is now trying to start her own hedge fund. She knows her whistle-blowing will get a mixed reaction from Wall Street.

“Obviously, some doors will close, but maybe some others will open,” she said. “There are people out there who believe we should put investors’ interests first. Either way, though, I did what I did.”

NEW YORK (AP) – The Wall Street executive whose tip triggered the mutual fund investigation says she stepped forward because she was worried that small investors were being hurt – but had no idea somany companies were tainted by improper trading.

“What made me come forward was a conversation with my sister, who said she might never be able to retire” because of losses in her 401(k) account, Noreen Harrington, 47, of Manhattan said Tuesday. “I’m a bit overwhelmed with what happened. I’m a Wall Street veteran and I had no idea that the problems were so widespread.”

Harrington helped manage investments at Stern Asset Management.

New York Attorney General Eliot Spitzer’s office confirmed Harrington’s role Tuesday, saying it was her phone call this past May that laid the foundation for charges of securities law violations against Canary Capital LLC. In September, the hedge fund operator agreed to pay $40 million to settle the charges.

The case was the catalyst for a much broader investigation that has since expanded into dozens of subpoenas and accusations of wrongdoing by fund companies ranging from Putnam Investments to the Pilgrim Baxter fund family. Other companies, including Strong Financial and Alliance Capital Management, have acknowledged improper trading occurred, but not been charged.

Harrington had worked from 2001 to 2002 at Stern Asset Management, a division of the Stern family’s Hartz Group. Although she did not work at Canary, which was managed by Edward Stern, she had heard traders discussing arrangements that allowed the hedge fund to make after-hours mutual fund trades, which are illegal.

She called Spitzer’s office in May 2003, nearly a year after she had left Stern Asset Management. She said her motive was purely to help small investors, and had nothing to do with her departure from the company. Efforts to get comment from the Hartz Group about the departure and Harrington’s employment were not immediately successful.

Harrington said she was initially reluctant to give investigators specifics. She eventually changed her mind, though, and talked to investigators “a couple of times” on the phone and had two meetings. Her involvement ended by June.

She said she went to Spitzer because of his earlier investigation into analyst and other abuses at big Wall Street firms that had resulted in a $1.4 billion settlement.

“I just kept thinking about the individual investors,” she said. “I believe I did the right thing.”

Harrington’s identity was revealed by reporters at The Wall Street Journal and The New York Times. Had they not found her, Harrington said, she probably would have been content for her name to remain a secret. Until this week, she said, most of her friends and family were unaware of her involvement.

In an e-mail statement Tuesday, Spitzer said Harrington’s “gutsy decision to step forward helped start a process that will ultimately help millions of investors.”

Harrington, whose previous employers also include Goldman Sachs, is now trying to start her own hedge fund. She knows her whistle-blowing will get a mixed reaction from Wall Street.

“Obviously, some doors will close, but maybe some others will open,” she said. “There are people out there who believe we should put investors’ interests first. Either way, though, I did what I did.”