"Goldman Sachs failed to meet its obligations by allowing customers to engage in short selling without determining whether the securities could reasonably be borrowed at settlement," SEC Enforcement Division Director Andrew Ceresney said in the release.
The violation involved short sales of stock, in which investors agree to sell stocks that they do not own.
Goldman Sachs ran afoul of US regulations by not properly vetting arrangements to for those investors to borrow stock when it came time to settle their obligations.
Goldman Sachs is an investment banking firm known for high-profile government positions obtained by its executives, including US Treasury Secretaries Robert Rubin and Henry Paulson in the administrations of Presidents Bill Clinton and George W. Bush respectively.
