When you sell a stock short you have to have the ability to actually deliver the stock. When you are "naked" you have no way to actually deliver the stock. Various other sites say the practice is illegal. I called Schwab once and asked them if I could short the Torvec. They said no. What is reported here is not really shorting the stock. It's just the way the over the counter markets work. That was the explanation I was given by a woman who returned my phone call from FINRA.