It is allowed, but one of their main uses (Signature Campaigns) ban them.
It is not just moderators but any trusted member of the community (DT1 or DT2) that can give negative trust which will make the account wortless.
What does DT1 and DT2 mean?
They are the two levels of Default Trust. EX: DefaultTrust is DT0, people trusted by DT0 are DT1, and people trusted by DT1 are DT2, etc.