What makes you so sure your opinion is the correct one?  Of course it is my opinion.  And it is more likely than not.

I think the reason the SEC was willing to settle as low as they did was to not hurt the investors. If they thought that the P2O business was a scam, then they would more likely have wanted harder penalties. It wouldn't have mattered at that point. Investors would have already been screwed.

What has always irked me is that the "error" in judgement never had to be made.  The technology was good enough to stand on its own without the need for trying to make the value of the company look better than it was. Unless, as others have suggested, this was related to the attempt to get to the Nasdaq.

But all of this is IMO.  Well, and that of a few others.