NEW YORK (CNN/Money) - The New York Stock Exchange said Monday it will renew "as soon as possible" the search for a board member to represent investor interests after opposition led Citigroup CEO Sandy Weill to pull himself from the running.

Weill's weekend withdrawal is another apparent victory for Eliot Spitzer, the New York state attorney general, who has for months been humbling powerful Wall Street firms that he accuses of harming small investors.

A Spitzer spokesman said the attorney general had heated conversations with NYSE Chairman and CEO Richard Grasso over the weekend following Weill's nomination Friday.

Grasso in a statement alluded to as much, saying Weill's withdrawal came after he was "informed of the comments and the intentions of the New York State attorney general concerning his nomination."

Diana DeSocio, an NYSE spokesperson, said, "Our nominating committee will convene as soon as possible to review potential candidates."

Weill on Friday was named as one of six nominees to the 27-person board. He would have served in a so-called "public" seat designed to represent the views of investors.

But according to the spokesman, Spitzer told Grasso that having Weill in this position, "doesn't make sense."

Citigroup's Salomon Smith Barney unit last year agreed to pay $400 million to settle allegations brought by Spitzer and other regulators that the unit and 11 other financial firms misled investors with tainted stock research.

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The candidacy of Weill, who is worth $1.1 billion according to Forbes magazine, may have been hurt by his connection to Jack Grubman, the Salomon Smith Barney telecom analyst now barred from the industry.

Weill has said he asked Grubman to take a fresh look at AT&T stock. Grubman, who was seeking Weill's help in getting his children into a prestigious nursery school, eventually upgraded the stock.

At the same time, Weill was said to be trying to win the help of former AT&T CEO Michael Armstrong, a Citigroup board member, to help Weill win a boardroom power struggle. Both Weill and Grubman denied any wrongdoing.

The Spitzer spokesman said the attorney general probably would not have had a problem if Weill was nominated for a regular board position. But his objection was to the fact that he was nominated as "public representative," or as someone representing the interests of investors.

As for Weill, "he only reluctantly agreed to serve and was adamantly opposed to engaging in a public debate over his qualifications to do so," Grasso' statement said. Citigroup said the company and Weill had no comment beyond the NYSE's statement.

The story was first reported this past weekend. A report in the New York Times quoted Spitzer as saying he would complain to the Securities and Exchange Commission, which regulates the NYSE, if Weill did not withdraw his name. Spitzer threatened to mount a public campaign to quash the nomination, which he called an "outrage," according to the online edition of the Wall Street Journal.

Citigroup last year agreed to separate its investment banking and stock research units in an effort to stem criticism about analysts' conflicts of interest.

Grasso praised the "initiatives that [Weill] and Citigroup have put in place to restore investor confidence. Weill, Grasso said, "would have been a valuable contributor to our board."

"When Sandy and I discussed his potential service, he reminded me of his full agenda as CEO of Citigroup and the demands upon his time," Grasso said.

Weill, who turned 70 this month, is a director at United Technologies and the Federal Reserve bank of New York, but is no longer an AT&T board member. He is also chairman of the board of trustees of Carnegie Hall and a member of the Business Roundtable.

Shares of Citigroup (C: Research, Estimates) fell $1.50, or 4 percent, to $35.70 Monday amid a stock market selloff.

The NYSE board has seen controversy before. Martha Stewart last year resigned from the exchange's board of directors. Five months later, investigators have been unable to prove that Stewart had inside information when she sold her ImClone Systems Inc. stock just before its price plummeted.

"I did not want the media attention currently surrounding me to distract from the important work of the NYSE, and thus I felt it was appropriate to resign," Stewart said at the time.