Goldman Sachs Group Inc. in danger of losing business with a key group of clients as a result of the fraud allegations it faces: governments in Europe and the U.S.

Politicians in the U.K. and Germany are starting to call on their governments to cut ties with Goldman, which has long been one of the top financial advisers to European policy makers.

U.K. Liberal Democrat leader Nick Clegg, riding high in opinion polls less than three weeks before national elections, said on Tuesday that Goldman "should now be suspended in its role as one of the advisers to the government until these allegations are properly looked into." His comments follow Prime Minister Gordon Brown's recent characterization of Goldman's alleged behavior as "morally bankrupt."

The SEC does not have to win their "case". What is happening is that it is now politically very attractive to punish Goldman by the simple measure of cutting them off.

Easy to do and will snowball. Imagine this conversation between the board and a CEO - "So Britain and Germany will not deal with GS because they cannot be trusted but YOU want to do our deal with them?????"

What would you do?

Finally Shame is the tool as it always is in a healthy society.