You have to seperate short sales from what you lumping in to illegal market activity.
Short sales serve a very important function in the market. Without this sell side corporate management would be unaccountable, think Enron.
I want the market to go up as much as the next guy, but I recognize the importance of taking the less popular short side when a company becomes weak or deficient in certain areas.
Also, the problems that surface typically occur in equities that are not covered by Wall Street. Pink Sheet stocks, micro-cap stocks, etc, can fall under different regulations than the more well known securities. The advantage of a NASDAQ or NYSE listing is they are so heavily regulated and scrutinized its extremely difficult for shady business and trading practices to get past. After Enron and WorldCom, the whole business was shaken up and that type of activity in 'listed' securities is unlikely.
Pink Sheet and micro-cap stocks will have their issues because of the nature of the beast. They are priced that way for a reason.
