There’s been much speculation over the past six months about whether a departure by Goldman Sachs CEO Lloyd Blankfein, is imminent.
In March this year, things reached fever pitch when Charlie Gasparino reported that Blankfein was ready to leave the firm.
Then with some high level executive changes made, there was a feeling of: is he getting ready to leave?
But none of those reports dealt with one interesting reason that Lloyd Blankfein may be around for a while longer: there are still law agencies that want to prosecute Goldman in some way, for their part in the financial crisis.
And Blankfein could provide valuable collateral for that fight.
According to Reuters,
Of course, the Justice Department and New York’s attorney general are continuing to scour legal documents, e-mails and trading records. They could still find something fresh that implicates the firm.
For that reason alone, the board needs to keep Mr. Blankfein in place. As a former top partner of the firm says, Mr. Blankfein’s resignation could be the “collateral for a trade” that authorities eventually seek as a settlement — or, in extremis, to head off an indictment.
If the DOJ or New York AG do attempt to charge the firm with any wrongdoing, Blankfein’s resignation could be used by Goldman to avoid indictment or even to force a settlement; the firm could say: Look, we’re getting rid of the guy that was in charge, we’re making a huge sacrifice.
Obviously if Blankfein isn’t there, that move is off the table.