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Goldman staff stand by Blankfein

Hours after the accusations of fraud at Goldman Sachs began to reverberate through Wall Street on Friday, Lloyd C. Blankfein, the bank's leader, sent out voice mail messages to assure anxious employees that Goldman was unbowed.

business Updated: Apr 20, 2010 22:32 IST

Hours after the accusations of fraud at Goldman Sachs began to reverberate through Wall Street on Friday, Lloyd C. Blankfein, the bank's leader, sent out voice mail messages to assure anxious employees that Goldman was unbowed.

In the days since, Goldman's board and employees have rallied around senior management, including Blankfein, the chairman and chief executive.

The employees are shocked, even angry, that the Securities and Exchange Commission has filed a civil fraud suit against their bank. Goldman is ready for a fight, and Blankfein, his defenders insist, will prevail.

Yet, to Goldman’s many critics, the SEC charges seem to confirm suspicions that it has become a money machine that puts itself before customers.

Insiders say Blankfein, a former trader, has remade Goldman Sachs into a giant powered by a formidable trading operation, rather than by bankers who give advice to corporate clients and help them raise money.

“The firm has been taken over by traders whose attitude is that we have counterparties, not clients,” said one former partner who asked not to be named because he still does business with Goldman.

But the board appears firmly behind Blankfein. One reason is that under him, Goldman has been enormously successful — as proved by the latest quarterly results.

If Goldman did not care about its clients, its clients would go elsewhere, the bank has said. But to most clients, this may not be an option at all.

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