It has become a familiar refrain up and down Wall Street. Whenever questions are raised about the complex subprime mortgage derivatives the investments banks sold during the credit boom, back comes the response: caveat emptor.

Goldman Sachs rebutted the fraud charges brought against it recently by the Securities and Exchange Commission – the first case the US regulator has bought against issuers of these derivatives – by making just such an argument. The bank said that when it sold collateralised debt obligations (CDOs) that allowed investors to place bets on pools of subprime mortgages, it was dealing only with sophisticated investors who required no protection. They knew, or should have known, what they were doing. If they didn't – well, buyer beware.

Goldman has even referred to the investors who bought its CDOs as “among the most sophisticated mortgage investors in the world”.