Goldman agreed to pay the civil penalty to settle allegations, neither denying nor admitting culpability. It is the first settlement of an SEC and New York Stock Exchange regulation case alleging that a prime broker has played a role in abusive short-selling practices. It is claimed that Goldman Sachs acted on behalf of clients that used the system to mark their trades “long”, despite going short. A broker can make the trade as long as it reasonably believes the client is telling the truth.
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