Watching the FTSE (Euronext Z) out of the corner of my eye. Thin pre-Xmas market, usually no more than a couple dozen lots bid and offers. A few times a day someone comes in, bids or offers 100 lots a couple of ticks above or below the market. Market treats it as a barrier, bully pulls order, market shoots through that threshold. Mr Bully probably does a few cancel/replaces to make sure he stays at the back of the queue and doesn't get filled. Usual shenanigans. Today over US GDP figures there were 400 lots bid 89.5, biggest size I saw this week. Evaporated the usual way, market went south as usual, too. The volume done afterwards, in the move Mr Bully thus provoked, wasn't anywhere near 400 lots. If he traded it he was picking up pennies in front of a steamroller, doing no more than five lots at a time. Who'd be silly enough to play that kind of risk/reward over a news release?
I don't view this as market manipulation. I rather would call it "extreme market making with a speculative bent". Here is why it isn't market manipulation. The person posting the bid/offer could easily be executed against if they weren't careful, due to the markets being electronic. Because they take the risk of actually accepting a big position, it can't be considered manipulation. In the old days when bids/offers could be posted but not 100% executed against, that was manipulative.
It isn't strictly artificial. The bid was real enough. If someone had hit him for 400 lots, he would have been long 400@89.5 while the market dropped to 83. His excuse would be that plus, when asked why he pulled it: "Just changed my mind, guv." It's the risk/reward that intrigued me, because it looks b****y risky to me. Legality is Mr Bully's compliance officer's problem ;-)