The bashers use the toxic financing argument to turn attention away from and cover the real happenings and reason the investors lost their money.
Sorry. You have it precisely backwards. Toxic financing has been a problem for a long time. We were well aware of it on SI back in 1997-1998. Eventually someboy started a board to expose abuses.
At that time NOBODY was talking about naked shorting. Evil Shorty, yes, but not naked shorting. I believe credit for the current NSS hysteria goes to the late Gayle Essary of Investrend and FinancialWire. Essary was a promoter, and most of the companies he promoted were sleazy.
For that matter, most of the companies on Essary's FinancialWire "they've been shorted naked" list were sleazy. Funniest thing, we haven't seen that list recently. Some of the companies on it--AZNT and ECNC, for example--were proven frauds, but that didn't seem to bother Essary. Every one I ever checked out had problems of some kind. Problems that had nothing to do with NSS. Many had toxic paper floating around; many more were non-reporting Pinkies, so there was no way to tell.
The rest of your post is just fantasy. Toxic financing is really very simple: the company and the financier cut a deal. The company gets money; the financier gets restricted stock that has an anti-dilution clause attached to it. The financier begins to short against his restricted stock. Stock price tanks. The lower it goes, the more stock the financier gets, and he continues to short against it.
Nobody has to "work" to get the price down. It usually doesn't go straight down; the financier will cover some of his position now and then to give the stock a breather. Then he'll start all over again.
Yes, you're right: we "bashers" like to expose games like this. It's utterly perverse of you even to suggest that what happens is somehow our fault.
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