From SEC, Are short sales legal? Although the vast majority of short sales are legal, abusive short sale practices are illegal. Short sales used to manipulate the price of a stock are generally prohibited. Some examples of prohibited manipulation include: engaging in a series of transactions to create actual or apparent active trading in a security; or depressing the price of a security to induce other investors to purchase or sell the security. The $50 SP drop is clearly manipulated by organized short sellers and violates the above SEC rules. Without regulations, oil, traditional car companies and affiliates funded investment funds can drive a new competitor out of market with stock manipulation and mis-information, simply because they can lose billions of dollars. I wonder how to file SEC complaints on this, or if there is any on-going efforts(investigations or class actions against those firms) which I'll be grad to contribute.