Manipulation definitely happens where traders will show non-bona fide interest on one side of the market to provoke other traders or algos to react. It's known as layering or spoofing and like any behavior where you're placing orders to influence others rather than out of an interest to trade, it's illegal.

Most cases of this or similar behavior like stop running have involved human traders at loosely regulated click trading shops or smaller electronic firms that don't play by the rules:

https://www.finra.org/Newsroom/NewsReleases/2012/P178687

http://www.cftc.gov/PressRoom/PressReleases/pr6649-13

Aside from the regulatory risk, it doesn't fit the business model for most "HFT" firms, who generally are making many low-risk, low-reward trades with a small statistical edge based on proprietary models. Spoofing usually requires showing large false interest which entails considerable risk if you actually get elected. If you are fast enough to make markets or arb crude oil, you can make way more doing that than manipulating the DOM hoping to push algos into doing something stupid until they figure your tricks out.

Predicting markets is hard. Predicting how thousands of heterogenous agents will react to your order is even harder, if not impossible.