Hedge fund traders must exercise caution when purchasing hard-to-value securities. Often, the primary source of pricing information comes from the brokers and dealers with which they do business. A recent SEC settlement illustrates a downside of this system: specifically, a broker’s customers can fall prey to an unscrupulous trader who moves beyond sales puffery to outright misrepresentation. The SEC charged that, on at least five occasions in 2011 and 2012, the head of the residential mortgage-backed securities (RMBS) trading desk at Goldman Sachs & Co. (Goldman) misled customers interested in certain RMBS trades, netting Goldman much higher compensation on those trades than the customers thought they were paying. This article summarizes the alleged fraudulent conduct, the SEC’s charges and the terms of the SEC settlement order. For coverage of other enforcement actions involving misrepresentations in sales of RMBS, see “Pricing Information Provided by Brokers to Hedge Fund Managers for Thinly Traded Securities May Not Be Reliable” (Sep. 17, 2015); and “Puffery or Securities Fraud? Litvak Conviction Sheds Light on Permissible Bounds of Bond Sales Talk and the Evidentiary Power of Bloomberg Chats” (Mar. 21, 2014).