Verus International Inc (VRUS)

[shotsky]

Etrade does not buy and sell shares, since it is a broker. That would be illegal, and is why etrade sends all our buys and sells to MM's.
MM's are broker dealers, and are the only ones that actually short penny stocks, but that's how they do business in the first place. MM's are not allowed to buy for themselves, they must be fulfilling an order in order to short the stock, and their gain is their spread between ask and sell - nothing more.
So, again, no one is shorting penny stocks, except momentarily by MM's.