Updated from Sunday, April 18
NEW YORK ( TheStreet) -- The Securities and Exchange Commission's civil fraud charges against Goldman Sachs (GS - Get Report) may be just the tip of the iceberg, according to a published media report.
The SEC is now is investigating whether mortgage deals set up by other big Wall Street firms may have misled investors, The Wall Street Journal reported Sunday on its Web site.
In the case of Goldman, the SEC alleges that the firm set up a deal with hedge fund Paulson & Co. that allegedly allowed the hedge fund to take short positions against mortgage securities. Goldman then allegedly marketed a collateralized debt obligation, or CDO, that included those securities to its clients without telling them Paulson & Co. had helped to choose the securities and was taking a short position against the CDO.But Goldman's wasn't the only big financial firm that structured deals to allow key clients to make bets against housing, the Journal report noted. Among other firms that created other mortgage deals that went sour as the housing bubble began to burst were Deutsche Bank (DB - Get Report), the report said, UBS (UBS) and Merrill Lynch , now owned by Bank of America (BAC - Get Report). 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, the Journal says. Follow TheStreet.com on Twitter and become a fan on Facebook.