Most people assume that Lloyd Blankfein's (Lloyd Blankfein news) fate at Goldman Sachs (NYSE: GS) is sealed: he will have to leave the firm, as his effectiveness as CEO has been seriously encumbered with lots of baggage.

The firm needs a fresh start. That's for sure. But the board has no intention of humiliating the man. So what to make of author and journalist Suzanne McGee's idea, shared by others perhaps, that Blankfein will step down as part of a settlement with the SEC. It is certainly a possibility. I am sure the SEC will raise the issue.

What is unclear is how hard the board will fight for Blankfein's right to a graceful exit. If the board had its way, it would orchestrate an appropriate transition, even if people guffaw. My sense is the Blankfein will fall on the sword for the firm he dearly loves. If it will seal the deal for a settlement Goldman Sachs can live with, he just might agree to an ignominious end. That said, all this remains speculation. There is no guarantee a settlement will be struck.

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