for sure, it is costing his customers who are now starting to walk away.
I would seriously hope they are.
Anyone leaving more than a bit of lunch money on Bitcoinica after all thats happened is either filthy rich or insane.
I think I can now agree with you that Bitcoinica has harmed Bitcoin as a whole, and is continuing to do so. Its turning this thing into a pyramid scheme.
Our biggest clients who trade on 2.5:1 leverage have been fine.
We will re-consider our 5:1 and 10:1 options soon.