Monero volume popping on Polo.  
  
We just had someone buy a big chunk all at once, all the way up the ask stack.  A nice start to the weekend?

Unfortunately you can't create a new, widely-adopted, decentralized monetary system without accidentally making a few early adopters rich in the process.  No matter how pure the intentions and tech, someone will likely get rich. 
 
All you can do is hope that it's the right people, with the right motives and morals. 
 
Monero is not a get rich quick scheme; it is the most powerful money in existence.  But if it succeeds the way we think it will, it's going to make a few people extraordinarily wealthy, and there's nothing we can do to stop that.

I was under the impression that once the value of your accounts assets were reached on your short that your position was auto closed, so how can the lender end up paying for the shorter?

All I see is 2 of his posts in the middle of others, noting to say he was involved. But I'm not reading that whole PDF.

http://www.deanslyons.com/PDFs/2014-03-25-Plaintiff-s-First-Amended-Petition.pdf

If there is insufficient ask liquidity to close his short.

If there is a Monero Bearwhale (couch, Otoh, cough) he's got pockets deep enough to avoid margin calls.  Let him keep borrowing XMR, so they must eventually be repaid with (hopefully non-dust) interest, preferably raising the bottom of some local minimum in the process.

Ok, As a intellectual exercise lets say your goal is to lose as much of lenders assets as possible, how would you do this and what would it cost (for optimal effect)? As an aside what could you do to hedge this action or even benefit from it?

You are asking how you could damage the lenders intentionally?  You could do it, but I don't think you could profit on it.  You would need to take them up on their loans, even at extremely high interest rates - really create a lending frenzy.  Use those loans to set up elaborate sell walls near-the-money.  Ensure you have only minimum margin requirements in this account #1. 
 
Then, with account #2 you could have to place a titanic buy order, eating through all your self-errected near-the-money walls at once and skyrocketing the price by a major % amount.  This would liquidate your account #1, and force Polo to try to repay the lenders.  But since your account #2 is still driving up the price an irrational amount the lenders would not be able to be compensated. 
 
This would cost you significantly because you would eat the losses from having account #1 liquidated even though you would end up with a substantial portion of XMR in account #2. 



Cold blooded, as usual.  And correct.  I think once the official GUI comes out you will start seeing more people store XMR away in their own private keys.  Is that sensical or rational?  No, but it's how it will likely go down.

It is the classic, since long before any crypto - currency existed, and most effective way to squeeze the shorts to the wall. Take delivery.