'The Securities and Exchange Commission Friday charged Goldman Sachs & Co. and one of its executives with fraud in a risky offshore deal backed by subprime mortgages that cost investors more than $1 billion.

The SEC also contends that Goldman allowed a client, Wall Street hedge fund Paulson & Co., to help select the securities to be sold. Paulson in turn bought insurance against the deal and when the securities tanked, losing almost all their value, Paulson made a $1 billion profit.

The civil fraud charges were the first to be filed against Goldman, the prestigious Wall Street investment-banking titan that’s at the center of multiple inquiries into the causes of the global financial meltdown. Paulson has acknowledged that it reaped a $3.7 billion profit by betting against the housing market as it nose-dived in 2006 and 2007.'

Read more: Finally!! Goldman Sachs and Executive Charged With Fraud!