Taby:
Your assumption that there is more oversight on a major exchange is incorrect. NSS happens under the oversight of the SEC. As long as it's allowed by the SEC the exchanges willook the other way.
The SEC will open an investigation on a rumor brought to them by a hedge fund that is short a stock; but will not investigate a stock the has been on Reg SHO list almost continuous for two years.
Then, if the stock is doing OK on a major exchange there is the option maket maker, he is allowed to naked short, so someone can hedge in both directions with practically no cost.
Have no illusion that ethics has anything to do with the market. To get an idea how prevalent and effective manipulation can be Cramer related on his show how he used to short an Industry ETF causing it to drop before he took his short position in a stock in the ETF index.
Hank
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