The problem with letting Wall Street off the hook now is that so much of this stuff hasn’t really even been investigated yet. Just today, news is out that the New York attorney general is opening a broad investigation into Wall Street securitization practices during the bubble, which was four years ago and that a federal audit found that the top five mortgage companies defrauded the federal government.

It isn’t just that prosecutors haven’t gone after the bigwigs of Wall Street, it’s that they haven’t even gone after the smaller fry. If you think about it, it’s pretty surprising that Senate investigators have found so much damning stuff on email. Everybody knows the really naughty stuff isn’t going to be put into writing. That’s why you find so many LDLs in sensitive areas of Goldman’s emails—“let’s discuss live.”

How do you build a case against the higher-ups then? The tried and true method is to target the proles who committed more-obvious crimes, flip them, and work your way up the chain. None of that has been attempted (as far as we know) with Wall Street for its role in the crisis. Contrast that with the full-court press done to protect other investors in the Galleon and SAC Capital investigations, which have been filled with wiretaps, flips, and convictions.

So what are some of the “big risks” that do deserve criminal investigation? Here are a few off the top of my head:

— Reducing “the number of souring loans they returned to the originator in exchange for the right to buy some of the originator’s next batch of loans.”

That’s what the New Century bankruptcy trustee’s report says Wall Street did while denying putback claims by securities investors.

— “Peddl(ing) these mortgages with a willful disregard, bordering on fraud, for whether their customers could repay them.”

Lowenstein himself wrote that in The End of Wall Street. If even he thinks that the Street’s mortgage practices—which were clearly a major cause of the crash—were “bordering on fraud,” then why the carping about people calling for criminal investigations of and charges for things like Wall Street’s mortgage practices?

— Lying about how much debt you have.

Here’s Lowenstein in BW on Lehman Brothers’ Repo 105 scheme (emphasis mine):

Although Repo 105 enabled Lehman to mask $50 billion of debt, the firm’s reported debt was more than $600 billion. Put differently, Lehman’s net leverage ratio was either 15 times or 17 times, both sky-high. Either way, the world knew it was highly leveraged, and its solvency was a matter of intense public debate. Had Lehman presented its balance sheet with more candor, it conceivably would have suffered its crisis earlier; maybe it would have failed in July instead of September. Regardless, the cause of the failure wasn’t Lehman’s misguided attempt to beautify its books. It was its excessive appetite for debt, and the risk tolerance of its creditors, for years before.

Let’s assume that Repo 105 was the only book-cooking Lehman was doing (it almost surely wasn’t), and that at best it staved off Lehman’s bankruptcy by just two months.

The financial crisis—or at least the scale of it— was due in no small part to investor distrust of the books at banks like Lehman Brothers. Nobody outside Lehman and its auditor Ernst & Young specifically knew about Repo 105 in September 2008, but lots of people, like David Einhorn, knew or suspected that Lehman was cooking its books; that the numbers just didn’t add up.

Einhorn et al. were right and as Lehman’s woes trickled out during 2008, its credibility with the markets deteriorated. Accounting fraud is particularly problematic in a financial company that depends on the short-term whims of creditors. A little (like, say, $50 billion) fudging around the edges can undermine confidence in the whole house of cards and infect peers. So Repo 105 itself may have been just one more stone in the avalanche, but so was every other action that contributed to the crisis, many of which weren’t illegal but were unethical. This one was probably both, and it exemplifies the contempt Lehman executives had for straight dealing.

When you see a blatant fraud like Repo 105, you ought to treat it like the tip of an iceberg—evidence of a rotten culture likely to have perpetuated other crimes.

Deceiving people into buying your toxic assets as they start going bad.

I noticed two words missing from this piece: “Levin” and “Coburn.” 

So turn to Matt Taibbi, who just put out another anti-Goldman jeremiad in Rolling Stone.

Whatever you think about Taibbi’s muckraking style of journalism, it’s hard to read his piece, much less the actual Levin-Coburn report, and not come to the conclusion that securities fraud played a significant role in amplifying the damage from the housing bubble.

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 Follow him on Twitter at @ryanchittum.