07/12/2010 05:12 am ET Updated May 25, 2011

'Dead President Deals': Feds Interested In Morgan Stanley's Mortgage Transactions

But this really shouldn't come as any surprise to anyone. Every major firm on Wall Street had a hand in structuring a Goldman-like deal. In my story a few weeks ago about the SEC's case against Goldman I said that these bogus mortgage deals became common on Wall Street.

Morgan Stanley had the so-called dead-Presidents deals, named Buchanan and Jackson. Another Morgan deal, one called Libertas, defrauded investors in the U.S. Virgin Islands, according to a lawsuit. JPMorgan Chase played procurer for Magnetar, a hedge fund so artful in profiting from the meltdown that Northwestern's Kellogg School of Management praised it last year in a case study. A firm run by Lewis Sachs, until recently a top Treasury Department adviser, and UBS, until recently a tax-cheat favorite, created junky bonds that investors who bought them now claim were going bad even before the deals were closed.