The US Securities and Exchange Commission (SEC) announced Thursday that Goldman Sachs is to pay $15m to settle civil charges that its securities lending practices violated federal regulations. The bank had made improper representations to customers who requested that the firm locate certain stocks for short selling; Goldman had told customers that it had arranged to borrow, or believed it could borrow, the security to settle the short sale, known as "granting locates". However, the SEC has said that the bank had not performed an adequate review of the securities customers had asked it to locate.
The US Securities and Exchange Commission (SEC) announced yesterday that Goldman Sachs is to pay $15m to settle civil charges that its securities lending practices violated federal regulations. The bank had made improper representations to customers who requested that the firm locate certain stocks for short selling; Goldman had told customers that it had arranged to borrow, or believed it could borrow, the security to settle the short sale, known as "granting locates". However, the SEC has said that the bank had not performed an adequate review of the securities customers had asked it to locate.