September 12, 2009
I have just recently entered the OTC and pink sheet markets. I'm horrified by some of the things i see going on. Namely large Trade orginizations massively manipulating the market. The best example i can give right now is the trading being done on a pink sheet stock HTDS. HTDS has a bright future from all of the research I have done if it can break the strangle hold certain traders have on it. This is mostly being done by shorting huge amounts of stock at a high price but below the current PPS so they can make money and lower the PPS to where they need to buy it to cover their short sales. Recently Large brokers like Scott trade have suddenly stopped all buys but not sales on HTDS . You can imagine what this did to the PPS. What makes this most disturbing is that Scott trade will not explain why they did it and why many of the other brokers have not. Taking that in account then knowing that Scott trade's CEO was not only on the Knight Capital Group Inc board of directors but that he still holds significant stock with in that company makes things seem very dubious given the NITE has been known to be shorting HTDS for a while now.
While this may not be a case for investigation i believe it brings up enough questions about the harm short selling does to markets. I highly hope that the board will recommend strong measures to regulate short selling to avoid another situation like the the mortgage crash.