There's no question that Mr. Bordynuik knew he was defrauding investors. He gave investors the data as a fully tested process with each processor costing $80,000 and each capable of producing 115 barrels per day of oil at a cost of under $10/bbl for which he said he had offers to buy that oil from a refinery at around $90/barrel [the "WTI-$3"]. Further he said the company's plan was to build 2,500 of these sites in the "next few years" from 2009.

Penny stock investors who didn't question whether Mr. Bordynuik might be a fraudster or not, dutifully plugged his fake numbers into their spreadsheets and imagined those enormous returns. Those spreadsheets popped onto the message boards constantly. The stock soared with a low effective float to a market cap of about half a billion dollars.

Mr. Bordynuik, for his part, decided to take his pay and large benefits entirely in generous amounts of cold hard cash out of invested funds while he was leading investors to believe those 2,500 sites would translate to about $80/share or so in annual earnings. He 'altruistically' returned shares to the company, for which his trusting investors loved him. Mr. Bordynuik seemed to place zero value on keeping shares for himself. At his first opportunity, somewhere around $1.40/share or so, Mr. Bordynuik dumped 800,000 shares onto his loyal investors' heads.

In the absence of real information from the company, over the course of years investors eventually started to realize that the data in their spreadsheets was fake and the stock naturally took a beating. However instead of blaming the swindler who engineered the scam, they blame "colluding entities" for their woes. So that's where we're at.