The Securities and Exchange Commission came down hard on Wall Street powerhouse Goldman Sachs on Friday, accusing the bank of defrauding its own investors by concealing information from them about the riskiness of the subprime mortgages it packaged and sold.

The allegations against Goldman have been building for over a year now about a variety of schemes including the bank’s entanglement with AIG. But the SEC’s latest charges add further fuel to allegations that the firm managed to profit handsomely off the financial crisis it helped cause.

According to the SEC, the bank structured and marketed synthetic collateralized debt obligations that were tied to the performance of risky subprime mortgage-backed securities. Goldman didn’t tell investors important information about the CDO, especially that a major hedge fund, Paulson & Co., had helped select the risky portfolio and then taken a short position, essentially betting that its value would sink.

“The product was new and complex, but the deception and conflicts are old and simple," said Robert Khuzami, director of the SEC’s Division of Enforcement, in a statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

Ninety-nine percent of the assets in the CDO were ultimately downgraded, and investors allegedly lost more than $1 billion, according to the SEC.

Goldman denied the SEC’s damaging allegations. “We are disappointed that the SEC would bring this action related to a single transaction in the face of an extensive record which establishes that the accusations are unfounded in law and fact,” said Goldman.

The bank claims that it actually lost more than $90 million on the CDO in question, known as Abacus 2007-AC1, and earned a fee of just $15 million. It insists it provided extensive disclosure to clients, that it took a long position, not a short position, and that an investor, ACA, selected the portfolio, and not Paulson & Co.

It’s likely that Congress will hold hearings and we will find out more about what happened, or the Financial Crisis Inquiry Commission may probe the allegations.

Whatever the truth turns out to be, the charges shed light on why some Wall Street firms seemed to mint money even in the darkest days of the financial crisis. Many investment banks have claimed they were surprised by how precipitously the subprime mortgage market collapsed, but the charges indicate that some banks and hedge funds were not only aware of how risky the assets were in vehicles like synthetic CDOs, but they took steps to make sure those same assets were shaky and would lose value for some investors while making millions for others.