Spongetech Delivery Systems, Inc. (fka SPNGQ)

[Nikodemos]

No one is suggesting that shorting a stock is illegal. Even NSS is legal (to a point). The fact that NSS permeates markets in FTD's and goes unregulated, unpunished and is considered "illegal" but prosecution absent,... represents another matter altogether.

Many have witnessed Nite being on the ASK and not on the BID for months ad-nauseum, many have commented here, there and everywhere.

The posters point is that the behavior of NITE could imply WASH trades. Who else would absorb the substantiative (and prohibitive) costs of shorting this equity ($2.50 per share, plus share costs), in the volumes observed daily, can profit in this narrow trading range, and risk being able to do so at such volumes when trade executions are also prohibitive to profiting. Not to mention that the late-night account adjustments are inconsistent with IB account activity. Normally, shorting causes a REAL-TIME decrease in shorts available and covering the opposite. This account is not operating in real-time, but "off-line" and shows millions of shares being depleted and replenished daily.

Yesterday's volume, for example, was almost entirely reflected in NITE's short account with IB (having gone from 6,100,000 to 850,000 buy about 1am est, only to be brought back to 5,700,000 this morning pre-market-open). Strange goings-on. I have called IB myself, watched this ONE short account, and have questions as to what is going on here. That's all.

However, it could be that WASH trades by NITE fits that interpretation. Looking at NITE's stock price superimposed with SPNG's is also interesting in that NITE went from above $23.00 post-suspension open to around $13.90 thereafter. Interesting stuff.

PS- If you, or anyone else, can produce other accounts where retail investors may short penny stocks I'd would appreciate the posts/links. Thanks.

Another thread from thefitstar that reflects what I am questioning:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_S/threadview?bn=100008&tid=42761&mid=43559