In a surprising but good bit of news for Goldman Sachs Group, Inc. (NYSE:GS), it got a clean chit of wrongdoing from Securities and Exchange Commission into a $1.3 billion subprime mortgage deal.

Goldman sachs and SEC

It was surprising, because in February this year SEC informed Goldman Sachs Group, Inc. (NYSE:GS) that it will pursue a civil enforcement action over the deal, relating to sale of subprime mortgages in Fremont, Calif to investors in 2006. The SEC was investigating whether or not Goldman Sachs Group, Inc. (NYSE:GS) knowingly misled investors to believe that the mortgage securities were a safe investment. Goldman’s Fremont deal, popularly known as Home Loan Trust 2006-E, was one of the accused in the mortgage-backed securities scandal. Apart from Goldman, Wells Fargo & Company (NYSE:WFC), and JPMorgan Chase & Co.(NYSE:JPM) also received warnings of potential action by the S.E.C.

On the clean chit by the SEC, Goldman Sachs Group, Inc. (NYSE:GS) remarked in a quarterly filing released on Thursday, “notified by the S.E.C. staff that the investigation into this offering has been completed,” and “that the staff does not intend to recommend any enforcement action.”

The case could act as a precedent that federal investigations on financial crisis lose steam, as the deadline to file cases approaches. This decision was very unlikely, as in January, the S.E.C. and other authorities vowed to hold the banks accountable, after President Obama announced the formation of special task force to investigate the residential mortgage mess. The financial crisis was the result of sales of subprime mortgages to investors by Wall Street firms and government-owned mortgage finance giants, Fannie Mae and Freddie Mac, which in the process suffered losses running in the billions. SEC and other federal regulators, including justice department, are also investigating various other cases involving financial crisis.

In yet another scandal, numerous banks have been alleged in rate rigging. In an enquiry by British and American authorities, Barclays PLC (LON:BARC) (NYSE:BCS) was fined $450 million for manipulating LIBOR (London interbank offered rate). JP Morgan recently revealed that apart from receiving subpoenas and requests for interviews from government authorities, including S.E.C., Justice Department, Commodity Futures Trading Commission, and regulators overseas, it is also a party to private litigation. It revealed that scrutiny regarding the cases filed against it by brokerage firms and local towns claiming they lost money because of problems with Libor, dates back to 2005 and not 2006 as was earlier told by bank.

Though Goldman is not involved in the LIBOR scandal, it’s still not off the hook. Federal Housing Finance Agency cited the Fremont investment in its action against Goldman, involving the sale of $200 billion in mortgage-backed securities to Fannie and Freddie that later soured.

The clean chit was welcome news for Goldman Sachs Group, Inc. (NYSE:GS), avoiding another fine from the SEC, like the one in 2010, where it was fined $550 million to settle accusations that it sold a mortgage investment that was intended to collapse.