AI market round up: Goldman gets slap on the wrist
Goldman Sachs has been fined what some might call a rather lenient amount, $2 million, for selling short an IPO pre-sale.
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. It is yet further proof that the SEC is intensifying its oversight over prime brokers and forcing them to police their clients more vigorously. However, a $2 million penalty is unlikely to encourage prime brokers to step up to the role.