Why would you trade on a platform where you bet against the platform owner?
We're market maker, yes.
But we don't bet against our customers.
Why should we take the risk when we can comfortably earn the spreads and hedge the customers' orders elsewhere?
You can sign up for an account and see our historical prices. We are completely open about this data. If you want all our 120,000 ticks so far, I can export for you. Then you can compare with Mt. Gox prices.
Bitcoinica's price is extremely accurate - our highest on 9/11 is 7, not the ridiculous and non-tradable 15. If you short on Bitcoinica you won't be liquidated because of that. We use an algorithm to manage the prices with absolutely no human intervention.
A bit off topic - but have you any plans to create a Mandarin version of your website (and other languages)? I think you are in a strong position to impact on the Chinese uptake of bitcoin (您是中国人吗？）