Walt, thanks for sharing that story. I think there is a long tradition of this kind of thing. Not exactly what you described, but plungers and punters have been around for more than a century. All you have to do is read the Jesse Livermore biography. “I began in the smaller bucket shops," Livermore said, "where the man who traded in twenty shares at a clip was suspected of being John W. Gates in disguise or J. P. Morgan traveling incognito.” 

Or this: "The markets in Livermore's day were murky, corrupt, and frequently manipulated, but he learned that even all of the Robber Barons working together to prop up a stock could not keep it up when it had to go down. He learned that the market moves by fits and starts, and that a trader who is right about the overall direction can still lose if his timing is off.... In the stock-mad Gay Nineties, the high-class end of the market was beyond the reach of the average investor. Most got their taste of market action in these quasi brokerages. Although some of the bucket shops were seedy holes in the wall, many tried to look respectable. Like legitimate brokerage firms, the bucket shops all had big boards where boys marked up the latest prices quotd by telegraph from the New York, Chicago, and sometimes even the foreign markets. Many had ticker tape machines. In some, the telegraph wires went no farther than the wall, and the ticker tape merely unwound from a box where the proprietor had placed a day's worth of phony market action the night before.... He made his money in bucket shops. He played bucket shops all over the East Coast, then moved on to Chicago, St. Louis, and even Denver, trading in disguise, under assumed names, because eventually most of the bucket shops in the country barred Jesse Livermore for the same reason that casinos bar card counters--he won."

What is different today, is that the plungers and punters trade on  the same market as everyone else, as your story makes clear.