"Are you sure that applies to stocks in OTC ? I was wondering who were selling in the past few days. Stock price simply jumped down. Will one lend his stocks for someone to do that to his holding to this extent ? Can we block this loophole in future ? Thanks."
Naked short selling is illegal. But I think Market makers have some limited exemptions for the sake of creating the liquid market the shares.
Brokers lend the shares of their clients for short selling without the knowledge of their clients. This needs to prevented.