The New York Times’s Louise Story and Gretchen Morgenson score a major scoop this morning with news that the SEC is charging Goldman Sachs with fraud over its structuring of CDOs, saying “the bank created and sold a mortgage investment that was secretly devised to fail.”

This is a huge story. The SEC has found that its jaws still snap; Goldman, which has heretofore seemed virtually untouchable, is in the dock; it illustrates short-sellers’—John Paulson specifically here—role in creating the crisis and making billions off it; and the press and bloggers can claim a big victory, regardless of the ultimate outcome of the case. It also points the way to possible further SEC actions over the banks’ similar dealings with Magnetar, which ProPublica detailed so impressively last week.

There’s no doubt that press coverage was instrumental in this turn of events. On Christmas Eve, Morgenson and Story unleashed a terrific story zeroing in on how Goldman Sachs structured its Abacus deals so they would fail, all while betting against them.

As the Abacus deals plunged in value, Goldman and certain hedge funds made money on their negative bets, while the Goldman clients who bought the $10.9 billion in investments lost billions of dollars.

The SEC is charging is that Goldman misled investors by telling them one company, called ACA, was managing the CDOs, when it was actually letting hedge-fund king Paulson pick bonds for it. Here’s the SEC, from its press release:

“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, Director of the Division of Enforcement. “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.”

And boy did Paulson know how to pick ‘em:

According to the SEC’s complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.

There’s plenty of other thread to pull on in the Times’s Christmas Eve piece, including a little-known company called Tricadia that created particularly toxic CDO’s to allow clients to bet against them, and whose vice chairman up until a month ago was a senior adviser to Treasury Secretary Tim Geithner. ABC News from then:

White House visitor logs show Sachs was a regular in the West Wing, holding dozens of meetings with White House economic adviser Lawrence Summers, Chief of Staff Rahm Emanuel, and with staff for the National Economic Council. The logs show he had at least five meetings with President Obama in the Oval Office last year, and had participated in the president’s daily economic briefing.

And this is hardly the only chicanery surrounding Abacus. Bloomberg’s Jody Shenn wrote an important story on Abacus in November that reported Goldman was using its “sole discretion” to pay junior tranches of the CDOs before senior ones—the opposite of what’s supposed to happen.

Goes to show you what good, tough journalism can do. Fraud charges have finally hit Wall Street, and The New York Times was instrumental in digging it out.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.