Respected Rochdale Securities analyst Richard Bove issued a sobering research note to clients Friday, in the wake of the news that US market regulator The Securities and Exchange Commission was charging Goldman with fraud.
Bove said that he thought it was unlikely that Goldman CEO Lloyd Blankfein and CFO David Viniar would remain with the firm in light of the scandal, as 'someone must fall on their swords for the devastating decline in this company's persona, and they may be forced to do so for public relations reasons'.
One banker told Here Is The City: 'Goldman has obviously managed to piss off some really powerful people. The firm is seen to be too clever for its own good, and the knives are out. This whole things has been totally overblown, but momentum will build and those with an axe to grind, or who have a grudge against the firm, will use this to their advantage. Personally, I doubt that either Blankfein or Viniar are vulnerable at this stage, but I guess it depends on whether any 'smoking gun' emerges as more details become known'.
Finally, The Financial Times reports that Blankfein is due to testify before the US Senate's Subcommittee on Investigations on April 27th, and lawmakers will no doubt use this fraud charge to bash him even harder over the head.