The Securities and Exchange Commission’s case against Goldman Sachs is weak, but the crisis has ominous implications and is a "death wish" for the financial system, says star bank analyst Dick Bove of Rochdale Securities.

“It’s setting the stage for collapse (of our financial system) one more time,” he said in a research report.

Bove says media coverage so far has neglected to elucidate the demand side of the story.

The subprime mortgage security created by Goldman “was not a retail product sold to unsophisticated investors,” he pointed out.

“This was a product in high demand by sophisticated investors. The best example of this is that they bought billions of dollars in this and other like instruments,” he said in a research report obtained by CNBC.

The investors were well aware of the risks, Bove says.

"Institutional investors (notably pension funds) needed to purchase instruments with high risk adjusted returns," he wrote.

“The synthetic derivatives market was believed to be an ideal place to create such securities. By working with investment banking firms, the pension funds could attempt to fashion high-yielding securities that they deemed to be safe by using proxy subprime mortgages.”

Goldman wasn’t alone creating these high-risk products, Bove explains.

Others agree on that point.

“This is probably just the tip of the iceberg,” Chizu Nakajima, director of the Centre for Financial Regulation and Crime at Cass Business School in London, told Bloomberg.

“If the SEC’s action is actually successful, it could well open up the gates to other litigation worldwide.”

Bove also said the stock is still worth buying even though it is under a cloud of scrutiny. In a research note, Bove said that the charges will not keep other companies from working with Goldman, Reuters reported.

The bank has long been considered one of the strongest on Wall Street.

If Goldman maintains those relationships, which would keep it solidly profitable, the recent dip in the stock price makes Goldman shares "a compelling buy," Bove wrote in the note.

The one major repercussion for Goldman could be that the bank might be forced to shake up its management. Bove said CEO Lloyd Blankfein or chief financial officer David Viniar might have to leave the company for public relations reasons.

Bove did not name any potential replacements, but said there are capable executives that could step in and continue to run the bank and produce big profits. A new CFO might have to come from outside the company, Bove added.

Meanwhile, Britain's Prime Minister Gordon Brown called on regulators there to investigate the bank as well to determine if it misled investors in Great Britain, Reuters reported.

Fitch Ratings said the charges and ongoing investigations would not affect the bank's long-term credit default rating. Goldman currently carries an investment-grade "A plus" rating from Fitch.

Despite the charges and more potential investigations, FBR Capital Markets analyst Steve Stelmach maintained an "outperform" rating on the stock with a price target of $190. He did however, remove Goldman from the "FBR Top Picks" list because the charges could potentially alter banking regulations.

Uncertainty surrounding possible new financial regulation legislation could limit a rise in Goldman and other financial companies' stock prices, Stelmach said in a note to investors.

Goldman's shares, in particular, will face pressure because of headlines surrounding the charges and because the SEC case could alter financial regulatory reform legislation currently being discussed by Congress.

Analysts say the timing of the Goldman charges could give Congress a chance to add more oversight to the banking sector.

Goldman reports first-quarter results on Tuesday. Analysts polled by Thomson Reuters, on average, forecast the bank will report a quarterly profit of $4.01 per share.