This is not a defense of Goldman, as I think what Goldman did is wrong, but basically the Bush administration pulled off a MASSIVE scam on retail investors that is much worse than what GS did.
http://www.zerohedge.com/article/usa-vs-gs-pot-calls-kettle-blackThat transaction was the $4.6 billion of the Fannie Mae Preferred Stock issued on May 7, 2008. This very large piece of crap went into the garbage can four months after it was issued. It paid one lousy quarterly dividend of 2% and then poof it was all gone. The original investors saw a 95+% loss of their principal. It was a wipe out that was four times the size of the Abacus deal.
When comparing the Fannie pref deal to the Abacus deal it is very important to make the distinction of who got bilked. In the case of Abacus some sophisticated investors took a big risk with other people’s money and lost. In the case of Fannie the deal was sold retail. It went to unsuspecting investors. It was peddled to Community banks across the country. It went to public bond funds and into thousands of IRA’s. It went to widows and orphans. There can be no question that the standards of disclosure must be higher on a public deal sold retail than a private deal sold to sophisticated investors.