New York (CNN) - There's nothing new about tensions between state and federal securities regulators. In fact, New York's securities law goes back to the 1920's, long before the federal legislation that set up the Securities and Exchange Commission in the early days of President Franklin D. Roosevelt's New Deal.

But up until recently, the commission was considered the ubiquitous watchdog of Wall Street, leaving the states to deal with more local issues. State regulators -- many of whom do outstanding work -- sometimes chafed under that arrangement.

What has now propelled the conflict to the fore is the recent high-profile role of New York Attorney General Eliot Spitzer in uncovering Wall Street scandals and obtaining a $1.4 billion settlement with leading securities firms. Spitzer rubbed salt into the SEC's wounds with his more-recent case involving a hedge fund's trades with major mutual funds.

Add to that, the charges that Oklahoma's Attorney General Drew Edmondson brought last month against Bernie Ebbers and other former WorldCom executives allegedly involved in the biggest accounting scandal is history.

Those last two cases, mutual-fund trading in New York and WorldCom in Oklahoma have raised the ire of SEC chairman William Donaldson, who complained to a Senate Banking Committee hearing Tuesday that those state regulators did not consult with his commission, which already had those activities under scrutiny.

And without being specific, he suggested that politics might be rearing its ugly head in some areas of the country.

I'm not blind to the realities of the political world, but I contend that a desire for headlines can pervert both effective securities regulation and the judicial system.

The joke in political circles -- and it has a strong ring of truth -- is that when you scratch a state attorney general, you find someone who wants to be either a governor or a U.S. Senator. It doesn't hurt anyone in the quest for such office to claim that he or she is a vigorous defender of individual investors. Of course, that's a commendable goal, but it shouldn't be done at the detriment of efficiently functioning financial markets.

In the interests of full disclosure, I should note that my son was once the chief securities regulator of New York State and now is an assistant general counsel at Merrill Lynch. And I've been covering financial news since before he was born. So I have heard the federal-state argument from both sides, and we've had some spirited discussions.

My own view is that most state regulators are committed to protecting the individual investor and the integrity of the securities markets. But they can't ignore the national responsibilities of the SEC.

There is the danger of fragmenting securities regulation. Having too many parties in the mix could be counter-productive and discourage the settlements that regulators depend on.

We need reasonable, non-duplicative and uniform regulation, and that can be achieved by maintaining a delicate balance between federal and state powers.