Good to know that they're not limiting their investigation to Goldman Sachs, because this is a systemic problem and crooked Wall Street practices need to be ripped out by the roots. Not that I'm all that hopeful, because these charges are notoriously hard to prove, but you never know:

The SEC's case against Goldman Friday has exposed an open secret on Wall Street: As the housing market began to wobble a few years back, some big financial firms designed products aimed at allowing key clients, such as hedge funds, to bet on a sharp housing downturn.

Among the firms that created mortgage deals that soon went sour were Deutsche Bank AG, UBS AG and Merrill Lynch & Co., now owned by Bank of America Corp. It isn't known what deals the SEC is investigating.

Further cases could hinge on whether the SEC sees what it considers misrepresentation, and not just questions such as whether a deal favored one client over another. A critical part of the SEC's case against Goldman is that the firm allegedly misled investors by not notifying them of the role of hedge-fund investor John Paulson—who was dubious of the housing boom—in selecting what went into the mortgage deal Goldman sold. Goldman said it fully disclosed the investments and didn't need to reveal the Paulson connection.

[...] Soured mortgage investments helped trigger the near-collapse of American International Group Inc., which had insured at least $1 billion of bond deals issued by Wall Street firms in 2005 that reflected hedge funds' input, according to documents reviewed by The Wall Street Journal and people familiar with the matter. Taxpayers had to foot the bill for AIG's rescue.

Ultimately, the problems landed at American doorsteps. Losers in the mess included, for instance, a county in Washington state.

On Friday, SEC enforcement director Robert Khuzami said the agency will look closely at mortgage deals similar to the Goldman one that is the focus of the SEC action.