Any broker can legitimately short a stock but it is the MarketMakers who are the ones who are mostly the criminals. They are the ones who do most the the naked shorting. Then they manipulate based on wash trades and hire bashers to post negative information against the OTC companies. Charles Schwab and the other brokerages don't give a crap about the penny stocks. The SEC has given the MM's leeway to do just about anything in the OTC. They are the ones who make large sums of money by driving an OTC company into bankruptcy.

https://www.investopedia.com/articles/optioni...elling.asp
Jan 31, 2018 - In essence, you deliver the borrowed shares. ... Here you owe the shorted shares to the buyer but "fail to deliver." This form is called naked short selling. These short sales are almost always done only by options market makers because they allegedly need to do so in order to maintain liquidity in the options markets.

counterfeitingstock.com/CounterfeitingStock.html
In order to be a market maker, they must always have shares available to buy and sell. Market makers get certain sweeping exemptions from SEC rules involving naked shorting. Short Seller — An individual, hedge fund, broker or institution who sells stock short. The group of short sellers is referred to as “the shorts.”