On Glass-Steagall

Let me preface the following with a couple of plain statements. I have had some formal education in business but do not have a degree nor an abundance of expertise in these matters. The arguments and conclusions I will put forward are based on accepted facts and logical inferences.
After watching Lloyd Blankfein, before the House Financial Investigative Committee, state repeatedly “We did nothing wrong, we were principles in these transactions”, a little bell went off(light went on). Why did he keep repeating that phrase “We were principles”?
The intent of Glass-Steagall was to unblur the distinction between principle’s self-interest and a fiduciary’s obligation by separating the originator and the buyer of financial products. It would be unethical of an originator to represent a product to a buyer as viable when it knew it was not, had a vested interest in the outcome, and had the power to make it toxic. It is the third part of that statement that troubles me the most.
People do unethical things everyday, I’m aware of this, and usually money is mixed up somewhere in it. That part that troubles me is possibility, since the repeal of G-S, that an entity could present themselves as a fiduciary when they are a principle in the transaction, would be inclined to skew the deal in their favor, and, as a bank holding company, have the ware-with-all to make this happen.
This is the problem with “Too Big to Fail”, that it tends toward a strategy where the most powerful entity could try to consolidate the other players by gaming the system, causing bank and market calls they know can not be covered, knowing the government can not let them fail. I’m not saying this did happen but it is conceivable.
The only way to prevent this in the future is to bring back G-S, break up the large trading houses and encourage competition and whistle-blowing by having more players in the game.
I’m outside of my comfort zone on these matters but I don’t see anything in the media about the obvious conflict of interest expressed here. This makes me believe there is more than a grain of truth to it. I’ve been trying to get a person to guest-blog on these matters but she won’t return my calls. Tis pity, tis.