joe, here's some articles written by an ex (I think ex) market maker. The first one explains shorting. Try and read them all, they are pretty informative. The problem is that BB stocks are not governed by the sec rules so shorting happens. Also the offshore people short the BB's. but you're right, as per this article stocks under $5 are not supposed to be shorted. btw, if enough people write to the sec and complain about this situation, maybe they'll change that, and have the BB stocks covered, like the rest of the stocks.
News 
Market Data 
Discover 
