Good observation. It appears NITE would have gotten away with violating Reg SHO for failure to mark short sales and failure to locate borrowable shares if it were not for an SEC investigation into what caused millions of erroneous NITE trades. It's like a cop finding contraband in a car that caused a massive pile up and catastrophic road crashes. In this case, the SEC charged that the erroneous trades were caused by a code error in an automated Knight router.

One could say it took 4 million erroneous trades for the SEC to notice NITE's Reg SHO violations.  Market makers, in their arrogance and robbery far worse than common street thugs, factor the  unlikelihood of getting caught against the steady stream of millions made in illicit manipulative trading. The rare fine is just an item in their overall business overhead.