Goldman Sachs Paydays Suffer on Lost Leverage With Fed Scrutiny

On Sunday Sept. 21, just before 3 p.m., Lloyd Blankfein gathered the top executives of Goldman Sachs Group Inc. in his 30th-floor office and set off a chain of events that would forever change the company he leads.

It had been a week like no other on Wall Street. Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, was bankrupt. The credit markets, which Goldman uses to fund its business, were frozen. And Treasury Secretary Henry Paulson, Blankfein's predecessor as chief executive officer of Goldman, was begging Congress for $700 billion to save the financial system. Goldman's stock had plunged as much as 26 percent in one day.