Naked Truth Dressed to Baffle

Updated from 9:07 a.m. EDT

In early February 2005, something truly bizarre happened to the shares of Global Links(GLKC Quote) that thrust an unknown, pink-sheet stock into the center of a heated debate over naked short-selling.

It all started when the company completed a 350-to-1 reverse stock split -- an unusual step in itself, but one that paled alongside what came next. With 5.43 million shares outstanding and a float of 1.15 million shares, Global Links saw trading volume of 143.5 million shares in the first four sessions of February, driving the stock as low as 8/100ths of a penny.

"What happened the first week of February 2005 really took us by surprise," Frank Dobrucki, Global Links' CEO, wrote in a letter to shareholders. "It became very clear that we had no control of the volume or price of our stock in any way. Outside forces were now manipulating our stock." (Dobrucki didn't respond to requests for an interview.) ...