NYSE Regulation Inc. announced today that it has censured and fined four firms for violations of new short-selling rules.

The regulator reported that it has sanctioned Daiwa Securities America Inc., Goldman Sachs Execution & Clearing LP, Citigroup Global Markets Inc., and Credit Suisse Securities (USA) LLC for operational deficiencies and supervisory violations concerning their compliance with Regulation SHO. The violations resulted in fines ranging from US$400,000 to US$250,000. The firms all consented to their penalties without admitting or denying the allegations.

The U.S. Securities and Exchange Commission adopted Regulation SHO in 2004. Among other things, it was designed to establish uniform locate and buy-in requirements in order to address problems associated with failures to deliver. The regulation division of NYSE Regulation first detected the violations at each firm during special examinations conducted within six months of January 3, 2005, the date for compliance with Reg SHO.

“Regulation SHO is an important federal securities rule meant to protect the market and investors from short sale abuses,” said Susan Merrill, chief of enforcement, NYSE Regulation. “As these cases demonstrate, firms that fail to enact effective procedures and systems by the compliance date threaten to undermine the important policies served by this rule.”