I will tell you a true story about price manipulation that I witnessed at a megacorp where I did contracting work.
This megacorp 401k allowed its employees to move money in/out of company stock with no restriction. And it could even be on a day-by-day basis, meaning you could buy company stock one day, then sell the next.
Now, you are not buying the actual company shares as they are traded on the exchange. Rather, you buy shares of a fund whose sole holding is the company stock, which it buys/sells on the behalf of all 401k account holders.
Here's where they screw up big time.
The fund is operated like a mutual fund. If you put in an order to buy $100,000, the price that you get is the NAV of the fund at market closing that day, and that NAV is of course computed using the company stock price at closing. Just like a mutual fund.
So, let's say that the company stock closed at $100 that day. They say your $100K is worth 1,000 shares, and let the record shows that. However, they do not have those shares yet. The next day, they go out and buy them for you. However, the shares have moved up to $101. You just got yourself a $1K gain.
Now, some people will say that, "But there's no guarantee that the price will go up. It could easily go down. It's all random".
But is it really random?
What happened was that a group of employees who each had a 7-figure account coordinated to move money in/out of this fund in unison. Together, the trading volume was high enough to move the stock price a good fraction of a percent. Yes, they were trading a few $100M each day.
So, now the stock price has gone up from $100 to $101 the next day, they all sold, and were guaranteed the price of $101. Now, the day after next when the fund went out to the exchange to sell, the selling dropped the price to $99. They are now buying again.
The effect was so clear that I wish I had kept the plot of the stock price that showed a square wave up/down with each day, and it lasted a couple of weeks or so.
This group of employees made out like bandits. Yet, they were trading according to what the company allowed.
Now, if I were an outside investor who held this stock, I might have spotted this repetitive up/down movement, and wondered what it was about, but I would not lose money if I just bought and held. The other holders of this fund however lost out, because the fund was buying high/selling low.
When I showed this to some employees at this company, they were incredulous at first. But then, one guy plotted out the price movement of the fund vs. the public stock price, he saw that the fund price kept going down and down with time. And it was significant at a few percent over a month or two, while the fund ER was minimal at a fraction of a percent per year.
A whistle was blown. The company then changed the rule to allow trading in/out of that fund once a month or so. Employees could still trade daily, but would incur a penalty of 1/2 percent or something like that. The shenanigan stopped.