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>> is that music getting loud or am i getting old? >> it is. can you turn down the music in your room, kids. >> i can't hear you. >> goldman sachs is the first major firm to be charged with defrauding the american public and it may not be the last. >> the s.e.c. is now investigating whether other wall street firms double crossed investigators misleading them into buying junk investments. lisa myers is senior investigative correspondent following this story. and it apparently was a surprise to goldman, these charges. >> it absolutely was. goldman says they were blind sided. the firm knew that t...

Accused the firm and one of its vice presidents of knowingly defrauding investors. >> anytime a storied firm like goldman sachs which has one of the finest reputations on wall street is charged with fraud by the u.s. government, it's an important moment. not just for that firm but for the financial system. >> reporter: here's what the s.e.c. is charging. that will goldman worked with a prominent hedge fund which handles largely unregulated investments for the wealthy to create a package of ricky subprime mortgages that was designed to fail. the hedge fund paulson and company is owned by billio...

Fraud suit against goldman sachs. do you approve of that? >> no, no. i mean, we should not legislate based on. and neck dotal events. this is a big issue. we shouldn't overreact. we might overreact as a congress and if we do, we're going to undermine the ability of people on pain street to get credit and our capital markets to give people who are entrepreneurs the resources they need to go out and create jobs. and congress tends to overreact when it acts on anecdotal information. this is a single event. we don't know what the outcome will be. goldman thinks it did nothing wrong and has been ag...