So I really don't have much experience in it, but I'm guessing when you invest money in multiple garbage penny stocks and they go to shit, the plan is you say that they've all been naked shorted in an effort to make yourself look less stupid? If so, it's not really working because you look ridiculously stupid.
Besides Merrill Lynch, UBS and E Trade, the suit names Knight Capital Americas, National Financial Services and Citadel Derivatives Group as defendants. The suit claims the defendants falsified documentation of trades and loans of Escala shares while conducting transactions on their own behalf and for others.