SEC Charges Eleven in Stock Manipulation Ring

[Phil(Hot Rod Chevy)]

Any stock under $5.00 is considered to be a penny stock and is not marginable and cannot be shorted by the average retail investor.

From Wikipedia:

In the United States, a penny stock is a common stock that trades for less than five dollars a share and are traded over the counter (OTC) through quotation services such as the OTC Bulletin Board or the Pink Sheets. Although a penny stock is said to be "thinly traded," share volumes traded daily can be in the hundreds of millions for a sub-penny stock. Legitimate information on penny stock companies can be difficult to find and a stock can be easily manipulated.

In the U.S. financial markets, the term penny stock commonly refers to any stock trading outside one of the major exchanges (NYSE, NASDAQ, or AMEX), and is often considered pejorative. However, the official SEC definition[1] of a penny stock is a low-priced, speculative security of a very small company, regardless of market capitalization or whether it trades on a securitized exchange (like NYSE or NASDAQ) or an "over the counter" listing service, such as the OTCBB or Pink Sheets. The terms penny stock, microcap stock, small caps, and nano caps are sometimes all used interchangeably, however per the SEC definition, penny stock status is determined by share price, not market capitalization or listing service. A penny stock is typically listed for below $5 per share (traditionally one dollar but defined as five by the SEC).

http://en.wikipedia.org/wiki/Penny_stock