There are variations to the Short and Distort scam. A promoter of a worthless stock could artificially inflate a stock price of a thinly traded stock and then promote the stock and sell short. Then without news the stock would drop back down to original levels at which point, the promoter covers his position at a profit.

The promoter could Pump and Dump and then Short and Distort and every year continue the cycle.

The underlying theme is stock manipulation by a person who is ultimately trying to make money off the backs of unsuspecting investors.

What can you do?

If you purchase and stock and you see that it is falling, don't panic. Check the fundamentals of the stock and if nothing has changed, there might not be a reason to sell. Call your broker for more information as to why he or she feels the stock is falling. It might be a good opportunity to average down.