It is called supply demand. By shorting you create an artificial supply that exceeds demand. keeping a lid on the price. The SEC could stop shorting if they required brokers to ask permission of shareholders to borrow their stock and if they compensated them if they agreed.
The problem with shorting a 50 cent stock is that the most you can make is 50 cents. But if the price goes up you can lose your #$%$.
KBIO announced that they were going to close the doors. Some poor fool thought it was an easy 2 dollar short. In stepped a group of investors lead by Shkreli Martin who announced that they controlled more than 50% of the stock. Stock jumped 400% and he lost it all and more.
The rules allow investors to work together and acquire stock without having to disclose their activity. Be carefully more shares of this stock traded in October and November than the previous 10 months combined. They also sold 8 million shares in the offering and no form 4s have been filed.