I don't entirely understand the process. Here's the flow chart as far as I've figured it out:
1. A sells a /20 of IPv4 space to B for, say, $5,000
2. A tells ARIN to transfer the chunk to B
3. ARIN says no, B hasn't shown that they need it
4. A and B say screw it, and B announces the space anyway
5. ???
6. ARIN receives a fraud/abuse complaint that A's space is being used by B. 7. ARIN discovers that A is no longer using the space in accordance with their RSA 8. ARIN reclaims the space and A and B are left to figure out who owes what to whom.
9. A and B ignore ARIN's email and continue to announce what they've been announcing. 10. ARIN attempts to allocate the /20 to someone else, who is not amused. Note that at this point ARIN presumably has no more v4 space left, so a threat never to allocate more space to A or B isn't very scary. Given its limited practical leverage, ARIN is only effective insofar as its members and customers agree that playing by ARIN's rules is more beneficial than ignoring them. R's, John