For Goldman Sachs, it was a relatively small transaction. But for the bank \u201d\u201d and the rest of Wall Street \u201d\u201d the stakes couldn\u2019t be higher.<\/p>\n
Accusations that Goldman defrauded customers who bought investments tied to risky subprime mortgages have only just begun to reverberate through the financial world.<\/p>\n
The civil lawsuit that the Securities and Exchange Commission filed against Goldman on Friday seemed to confirm many Americans\u2019 worst suspicions about Wall Street: that the game is rigged, the odds stacked in the banks\u2019 favor. It is the first big case \u201d\u201d but probably not the last, legal experts said \u201d\u201d to delve into a Wall Street firm\u2019s role in the mortgage fiasco.<\/p>\n
It is a particularly sensitive time for Wall Street. Washington policy makers are hotly debating a sweeping overhaul of the nation\u2019s financial regulations, and the news could embolden those seeking to rein in the banks. President Obama on Saturday stepped up pressure for financial reform by accusing Republicans of \u201ccynical and deceptive\u201d\u009d attacks on the measure.<\/p>\n
The S.E.C.\u2019s action could also hit Wall Street where it really hurts: the wallet. It could prompt dozens of investor claims against Goldman and other Wall Street titans that devised and sold toxic mortgage investments.<\/p>\n