Chief Executive of the Goldman Sachs Group Inc. has fiercely denied that the fraud suit filed by the Securities and Exchange Commission against his firm on Friday, tagging the complaint as "completely unfounded in law and fact". The company has now promised to defend its reputation and the firm overall.

But it does not look like the denials would work anymore and Goldman is definitely in huge trouble. Many believe that if Chief Executive Blankfein wants to save what little of Goldman's reputation is left, and his job, he should outright admit to the deal that the SEC has described as wrong. Then he should just very strongly make sure that the company does not deceive its customers once again.

Allegations are that Goldman sold collateralized debt obligations, or bonds which are backed by mortgage securities, to institutional investors without telling them that the specific securities had been handpicked by the hedge-fund manager John Paulson, and he was betting that these would fall. For this reason, he structured the securities so as to include the losers and not the winners.

Goldman has maintained that it had no idea that the mortgage securities were slated to go up or down, which could be true but the SEC complaint has quoted a Goldman employee who said, "The whole building is about to collapse anytime now".