I think the reason why foreigners are allowed to short still is because the SEC is afraid of creating too many restrictions which could potentially mean less foreign money available in our markets. This of course would be a bad thing... but honestly they are hurting the markets just as much as they are helping. The big boards are fine but OTC and Pinks, they can't sustain it.
SHAR unfortunately is a bit of a victim of the shorting. While I think they will do well by changing the CUSPID and the TICKER, shame it has even come to this point.