|For example, is it possible for a market-maker or a specialist to route orders through an ECN (one option) and sell at the bid, as if it was a normal sell?. The intent, of course, would be to lower price and shake out shares.|
Does it happen?
My best guess is it does but I can't prove it.
Think of MM's just like daytraders. They also trade for their own account and want to make money for their firm just like you and I want to trade and increase our investment capital.
And with the birth of hedge funds the short game has boomerang effects - especially on low float stocks.
If you want to ask specific MM questions there is a board on SI that you can ask.