Rightsmile, Inc. (RIGH)

[FullDeck]

The Market Maker is "Buying-to-Cover" from the insider (whoever you believe that to be), in order to cover the shares he "Sold Short" (naked, i.e., without actually owning them) earlier in the day.

It's the same process and pattern for the "Form W" ("Average") marked shares and the "Form T" (Late Report) shares.

Bottom line, MM "naked sells" 16MM short (sells shares he doesn't actually need to own) and then "Buys-to-Cover" from the insider at a lower price.

In today's case, the insider got the shares practically for free, so is glad to be able to "cash out" without cratering the PPS. So the MM "naked sells" 16MM @ .0005 to some unsuspecting retail market guy, then buys the shares from the insider at .0004 so he can deliver them to the poor guy the MM sold them to at .0005.

So... the MM sold 16MM @ .0005, receiving $8,000. He later buys 16MM @ .0004 from the insider, paying the insider $6,400, thereby netting $1,600 on the spread.

The insider is glad to get $$6,400 (cost him almost nothing), and the MM makes $1,600.

Should the unsuspecting retail guy who bought from the MM at .0005 be upset that an insider is selling at .0004?

Your call.

Hope that helps.