Last week, the U.S. Securities and Exchange Commission (SEC) announced that it was suing global investment bank and securities firm Goldman Sachs Group for defrauding investors.

The SEC claims that Goldman Sachs misled investors about the risks of investing in certain mortgage-backed financial products. The SEC alleges that Goldman Sachs created these products with the help of a hedge-fund manager who then planned to sell short (or bet against them).

Stock markets in the U.S. and Canada fell on the news of the SEC’s claims against Goldman Sachs. Shares of Canadian bank stocks also declined slightly, but they quickly recovered. That’s mainly because investors realize that the big-five Canadian banks had limited exposure to these types of complicated and risky financial products.

The big five Canadian bank stocks are good at spotting risky investments — and staying out

Canadian banks have long demonstrated an ability to identify and stay out of complex and risky financial arrangements like those Goldman Sachs and many other international banks were participating in. That’s another good reason why we continue to recommend all five big Canadian bank stocks in our investment services and newsletters, including our flagship publication, The Successful Investor.

Canada’s bank stocks have rebounded strongly since stock markets hit their March 2009 lows. In part, that’s because their more conservative lending approaches helped them weather the credit crisis and profit during the recession.

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Keep your investment goals in mind when buying Canadian bank stocks

Each of the big five banks have different objectives, so they’re not all suitable for every investor’s portfolio. For example, Bank of Nova Scotia (symbol BNS on Toronto) has been expanding its international operations lately, so it stands to profit from rising prosperity in developing countries.

The bank recently expanded its operations in Thailand: Right now, it owns 49% of Thailand’s Thanachart Bank. Thanachart has agreed to buy rival Siam City Bank. When the deal closes later this year, the combined bank will have more than 660 branches, 2,100 automated-teller machines and 18,000 employees. That will make it Thailand’s fifth-largest bank.

Bank of Nova Scotia will contribute $650 million to maintain its 49% stake in the merged bank. That’s 66% of the $988 million, or $0.91 a share, that Bank of Nova Scotia earned in the three months ended January 31, 2010. However, this new investment should add roughly $0.10 a share to the bank’s annual earnings.

Thai unrest shouldn’t hurt Bank of Nova Scotia

Thailand continues to suffer political unrest as opposition protestors aim to topple the government of Prime Minister Abhisit Vejjajiva. The protestors argue that the prime minister is leading an illegitimate government.

However, it’s not unusual for developing countries like Thailand to suffer political unrest, as the benefits of economic growth inevitably leave some citizens behind. Moreover, Bank of Nova Scotia’s long international experience will help it deal with any further instability.

You can get our full analysis of Canada’s big-five banks, as well as clear buy/sell/hold advice on dozens of other stocks you may be considering buying (or selling) in The Successful Investor. Click here to learn how you can get one month free when you subscribe today.