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Goldman Sachs Can Now Stop Whining

NEW YORK (TheStreet) -- What a relief that it now appears that Goldman Sachs (GS) is not the only big bank being investigated by the U.S. Justice Department over its role in creating, selling and trading and some of the complex securities at the heart of Great Financial Meltdown of 2008.

Not that it is a big surprise, but The Wall Street Journal is reporting Wednesday that Morgan Stanley (MS) is also under investigation. Morgan Stanley CEO James Gorman has said he has no knowledge of a federal probe of the company.

Goldman Sachs boosters love to complain about how their firm bears the brunt of all the anti-Wall Street fervor even though Goldman, according to its fans, holds itself to a higher standard of behavior than peers like Morgan Stanley, Citigroup (C) or Bank of America (BAC).

There may actually be a grain of truth to this Goldman propaganda. I don't think Goldman avoided the bulk of the massive writedowns that plagued its competitors by being the sleaziest and trickiest of the bunch. But that doesn't mean Goldman isn't sleazy and tricky. Tony Soprano or Don Corleone might have held themselves to a higher standard than other mobsters, but they were still mobsters.

To be clear, I am not equating investment bankers with mobsters. It would be an interesting comparison though. During the past decade or so, the investment banking industry's regulators did a pretty good job of keeping small-time crooks at bay while letting the big criminals make off with the real loot. It's kind of the way the mob operated before the RICO law was passed in 1970.

Truth be told, I was a bit worried about all the attention the Feds seemed to be focusing on Goldman. How could they look at Goldman without looking at all the other banks that doubtlessly put together similarly tricky debt deals? After all, as my colleague Lauren LaCapra pointed out, Goldman underwrote far fewer collateralized debt obligations transactions -- the deals the Feds are looking at -- than Bank of America, Citigroup, and JPMorgan Chase (JPM).

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