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Did you read the disclaimer about how GS may be short your positions? (page 9) Before you sop-up the media drivel you are being fed, you should stop and use your brain.
The SEC action is not about GS shorting their client's positions...it is about GS disclosing the fact that John Paulson was involved in the deal. The fact is that John Paulson's involvement was deliberately hidden by Goldman Sachs and their clients would not have been sold on the deal had they known he was. If Goldman Sachs had simply come out and detailed John Paulson's involvement before they sold the CDO then they would be free and clear of all charges.
More specifically: The SEC's action is about GS letting an unnamed hedge fund structure a CDO made up of a selected group of sick and moribund debts and then letting GS market it as a viable CDO, all without telling their client that these instruments were hand picked by a hedge fund intending to short them. This is akin to letting a gambler go into a hospital, picking out the really sick and dying patients and buy life insurance only on that specific group. The trick was of course, who was going to insure them? In this case, GS was the broker that allowed it to happen, by convincing the insurance company that these were the average viable patients without disclosing that they were individually targeted for their morbidity by a gambler intending to the beneficiary.