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BOSTON (TheStreet) -- Goldman Sachs (GS) stock fell on reports CEO Lloyd Blankfein had hired a top securities-crime defense lawyer by the name of Reid Weingarten. That appeared to indicate that Blankfein is worried he may have some personal exposure -- perhaps even criminal liability -- for his bank's misdeeds in and around the financial crisis.

Bullfeathers. The sober reality is that Blankfein hasn't a thing to fear, at least not from President Barack Obama's Justice Department.

Goldman Sachs' Lloyd Blankfein

Mind you, it is not a question of whether this

humble graduate

of Thomas Jefferson High School actually did anything wrong. The reason is that, guilty or innocent, Blankfein is lucky enough to live in a great nation in which securities fraud has been effectively decriminalized.

The process of decriminalization began under the Bush administration, thanks to the able leadership of a succession of attorneys general, and has been aggressively continued by the current A.G., Eric Holder, with support from the result-getting (on street gangs, insider trading and everything but banker improprieties) U.S. Attorney for the Southern District of New York, Preet Bharara.

Anyone who has had any doubts on that score should get hold of a 114-page civil suit that was filed against Goldman last week in New York State Supreme Court by

Allstate Insurance Co.


The suit didn't get much attention because it landed amid the stock-market rout. Allstate, which has filed similar suits against

JPMorgan Chase





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, contends that Goldman sold Allstate over $100 million in residential mortgage-backed securities even while describing them internally as "junk," "dogs," "crap" and "lemons."

In drafting its complaint, Allstate relied heavily on an April 2011 report by the Senate Permanent Subcommittee on Investigations. Goldman, the subcommittee report said, "was keenly aware of the poor quality of the loan pools." The insurer conducted some sleuthing of its own, and determined that Goldman misrepresented the percentage of owner-occupied dwellings in the mortgages underlying the securities. Allstate alleges that "Goldman and the originators knew that borrowers were misrepresenting their intent to live at the property, because Goldman, the originators and the borrowers all knew it would help shuffle the loan through the approval process."

Allstate also contends that loan-to-value ratios were grossly misrepresented for the mortgages. In one loan pool described in the suit, Allstate claims, nearly 25% of loans had LTVs of more than 100%, as compared to zero described in the offering materials.

The allegations in the lawsuit go on like that, page after page. But there's one thing missing from the lawsuit: Why now? Why is Allstate pursuing a civil case against Goldman Sachs without awaiting further action by the government? A criminal case, or even a wide-ranging civil settlement, would make any investor suit a slam dunk.

I'd suggest that Allstate is suing Goldman now for the same reason that chambermaid sued Dominique Strauss-Kahn: Both knew there would be no criminal case.

Not only is no criminal case on the horizon, but no major civil litigation either.

The internal-badmouthing allegations in the suit bring to mind similar chatter that was uncovered during the analyst scandals of 2003. With New York Attorney General Eliot Spitzer and state regulators nudging a somnolent Securities and Exchange Commission, the regulators snared a "global settlement" in which 10 Wall Street securities firms paid a total of $1.4 billion in forfeitures and penalties. The global settlement challenged longtime Wall Street practices, and would not have been possible without the threat of criminal prosecution. It may seem quaint and even penny ante by today's standards, which is very much the point: The conflicts of interest that were at the heart of the global settlement were considerably less troublesome than the widespread fraud in the run-up to the financial crisis. And they were decisively dealt with, in contrast to today.

Three years after the financial crisis, nothing even remotely approaching the global settlement is in the works. The closest parallel to the global settlement is the proposed robo-signing settlement with the major banks being pushed by the Obama administration, and which New York Attorney General Eric Schneiderman and other state AGs are correctly resisting.

The settlement carries what seems like a hefty price tag for the banks, $20 billion, but that is only a drop in the bucket when compared with the actual damage wreaked by their misconduct. In return, the attorneys general would absolve the banks from liability for a range of illegal practices. Even with that carrot dangled in front of them, the banks are resisting the $20 billion figure. I don't blame them. There is no realistic possibility of the banks being criminally prosecuted for engaging in systematic abuse of process.

All they face are lawsuits, like the one that the Good Hands People just filed.

If you or I were caught red-handed signing false court papers for financial gain, we'd be prosecuted at the drop of a hat. If you or I were kiting checks all over town, we'd wind up in the hoosegow, believe you me. But a different standard applies to the major banks, now that securities fraud has been decriminalized. They can walk between the raindrops, so to speak.

That certainly is true if you are one of the Lloyd Blankfeins of this world, but the same principle applies if you are one the kind of white-collar crimes that prosecutors traditionally target. Time and again in recent years, penny-stock promoters and crooked CEOs who would have been shoo-ins for prosecution have been let off the hook, targeted only by civil proceedings. A notable exception is former Duane Reade CEO Anthony Cuti, recently sentenced to three years for securities fraud. Yet dozens of CEOs accused of even worse chicanery by the SEC have little chance of seeing the inside of a jail cell. And it's not an exception for Bharara: the Cuti case was commenced by his predecessor.

So you can believe it when a "person close to the matter" told the

New York Times

on Tuesday that "Blankfein had not been subpoenaed and that no Goldman executive had received an individual subpoena." Just in case, he is hiring Anthony Cuti's lawyer, the aforementioned Reid Weingarten. Why not? You would, too, if your shareholders were footing the bill.


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Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, �The Mob on Wall Street,� which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at