So the IRS seizes an option on the shorted position rather than the position itself, which comes due when the position is realized. Or, any liability for a position is assessed back to the investor rather than the government. Or any number of other rules are established to keep the IRS from assuming liability for losses and return them to the investor.

And, of course, the three men who collaborated are charged with securities fraud and conspiracy.

Liquidators would also have rules allowing them to react to market manipulation and other artificial market influences.