The following is where I believe the (intent of) 144 rules (1% of the OS per qtr) are being twisted like a pretzel
the broker who has been pledged the block of shares can short against it allowing the MM to sell now and "deliver" the shares later when the restrictive legend is removed
as such, the transaction, and the total short position for that broker, is exempt from being reported as a short position
Exemptions The SEC also amended Rule 200(g) of Regulation SHO to allow broker-dealers to mark orders as “short exempt” to indicate that the order is not at a prohibited price at the time of submission or that the broker-dealer had a reasonable basis to believe that the short sale was subject to an exemption. In order for a broker-dealer to report trading as “short exempt,” however, the broker-dealer also must have policies and procedures to prevent the incorrect marking of orders and must conduct surveillance to ensure the effectiveness of its policies. The SEC established exemptions for orders related to (1) securities that a seller is deemed to own under Rule 200 of Regulation SHO that the seller intends to deliver as soon as all restrictions on delivery have been removed, (2) market makers’ transactions to offset or liquidate odd-lot transactions that change the broker’s or dealer’s position by no more than one unit of trading, ................blah blah blah...........
if you look at an equivolume or candlevolume chart back around Apr 30th we had a 5mil up day around the time the Cuming deal was being worked on .11 to HOD .17 close @.15 and DPDW got hammered the following trading day .15 LOD .11 close at .12 with 3 mil volume
ever since then IMO the selling has been absolutely DRIVEN by something other than objective trading
mystery posters appeared and chimed in with some pretty inflammatory and unsupported comments
I will add that it makes no difference to me if anyone buys into my theory or not. It is just one scenario out of many but to me, the number of indicators leaning that way is beyond coincedence so I searched out a few details when I had some free time (not much of that lately) and tracked down the loopholes in the 144 regs (above) that were the biggest hole in the story line.
So unless someone can punch a new hole in the logic of the scenario I have laid out, I believe it is entirely possible (I'll stop short of probable) that the shares held by one ex-employee, either in his control or in the control of someone associated with him, have been traded to deliberately tank the stock
And of course, being OTC, once the stampede is started in a sector that was weak for the past couple of years, there are always those who will follow blindly
spec steps down from the soap box and says good night
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