hedgeman,
The fraudulent part was referring to the companies. Stock scams the are financed by NIR, not NIR themselves perpetuating the fraud. Please read more carefully. There have been plenty of proven stock scams in the OTCBB/Pink markets.
There have been cases against lenders who have these offshre entities that have had cases brought against them claiming that the lenders have shorted the stock using the converted warrants to cover. Do a little research and you can find them.
The fact that these companies report their borrowing to the SEC in filings is a moot point. Are you so niave to believe that no company has ever submitted a less than honest SEC filing?
There is a bias against these type of lenders, and on this board specifically, to NIR and companies. They are predators who kill any stock that borrows from them.