Opportunity, logic says Smithline is shorting. If Moro can prove that and sue him, I would love for someone like Smithline go be successfully sued. Since Smithline is a lawyer, I would suspect he is using third parties and the funds are not actually shorting the stock. They are just converting their notes and through some hoops getting their cash.
As for manipulating this stock, I do not think there has been a great amount other than Smithline. Since 2007, Smithline was shorting into every news major news item. At times, Moro even listed the number of shares he was short.
Smithlines notes were convertible at 60 cents. When the stock price dropped, he did not have the ability to cover with the notes. The latest amendment priced the conversion down and 14 cents and window for Smithline to short above 14 cents flew wide open.
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