Very interesting. I just got off the phone with the SEC. However they investigate companies and not necessarily the strange trading at least per the number I called. I will look further on their website if there is another way to investigate the trading for any manipulation.
It's certainly an interesting article, though it's extremely dated. Though, many of the underlying principles or concepts he/she discusses in the article are probably "somewhat" applicable today.
However, today it's amplified at light speed- because the entire OTC and nearly all major markets, barring the "floor" of the NYSE, are nothing but electronic trading networks. There'd no longer be any "phone call" placed from say E-trade, trying to "match" order flow or get "inventory" or whatever as the article describes.
It's all done via algorithm, or at best, a human staffed trading desk "might" be involved and they'd simply be "flashing" electronic bid and offers onto the network to "game" it as needed, look for inventory, etc
What's not in the article or discussed IMO, is the real "kicker" to many OTC, penny, nano-caps, and that's what happens when they have convertible debt deals and boat loads of cheap options and 10's of millions of cheap shares issued out to who knows who? THAT is the difference in when things get "real interesting" in my amateur opinion and that of many, many people who have watched what happens when a Magna or Asher or similar become involved with a low vol, thinly traded OTC stock- and they hold a "note", a note with "resets" and "discount formulas" and other "provisions" (i.e. no floor price to shares they can get) in which they, the "finance house" makes more money and get more shares the LOWER they can make the share price go.
Remember, they always "claim" (look at language in this latest Magna deal, "claim" that they won't "directly" or via affiliates engage in shorting, blah, blah, blah, WINK, WINK)- but somehow everyone seems to know it's exactly what they do. How they do it? Probably via layers of sub companies and "friendly" firms across the street or a trading desk set up under some other LLC so it's not an "affiliate" per the highly legal-eze in the contract, etc.
Wall Street is already a dirty, corrupt place. You get down into OTC land, the place of boiler rooms, use of convertible debt money at near mafia terms, shady firms who can skirt the law on the fine line for yrs like Asher and Magna and similar and when caught just pay a fine (slap on the wrist) and then re-open under a new name 3 months later, 2 doors down, it's a sorted tale to say the least IMO. Legions written about it- and the SEC is so understaffed versus the 1000' of microcaps and associated lenders and finance houses and all- it's a 1000 to 1 shot they can even monitor and follow all the action it moves so fast. Every time they finally prosecute some ASHER type dude, 10 more have popped up and are using newer, faster technology to "work the system" even better and for more profit.
This isn't about guy's who make like $100K or $500K a yr or whatever- they're raking in $10's of millions of dollars (200%, 300% or more is the rumored returns an Asher firm makes on an avg convertible "note", often in about 6 months or less), getting filthy wealthy while crushing stocks and companies. If they have to pay a $1 million in a SEC fine and do 4 months at a club-fed white collar crime camp, then emerge and live out the rest of their life with $20 million in off-shore accounts, what the heck to they care? I've read a few books written by real life guys who were there, like that article cited. And it's amazing to know how corrupt and dirty it all is, no doubt.
My opinion has and always will be- if anyone is "shorting" or as some like to speculate "manipulating" a stock like BHRT, I'd put bank on it that in one way or another the trail leads straight back to those with whom they've done convertible debt, toxic notes or similar "financing" deals (warrants, etc) in one form or another. My 2 cents.
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