Much of the public angst about the SEC's (SEC news) fraud complaint against Goldman Sachs (NYSE: GS) has been about ACA, what it knew and how beholden it was to the hedge fund Paulson & Co. when it came to picking CDSs for that infamous ABACUS CDO. But the Washington Post notes that one of the main victims, German bank IKB, may be just as significant if this case ever makes it to trial.

IKB was one of the main victims when the CDO blew up. SEC officials are confident in this part of the case, even as the world debates the AVA aspects of the case. Regulators told the paper that IKB went to the bank because it wanted objective advice on the housing-related markets. So "it doesn't matter whether IKB was a sophisticated investor or not because Goldman did not provide the objective investment advice the German bank was seeking." In its complaint, the SEC said, "IKB would not have invested in the transaction had it known that Paulson played a significant role in the collateral selection process while intending to take a short position." 

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