We've been hearing a lot about bear raids and short selling market manipulation lately but upside manipulation is far more common. A recent investigation in Australia has revealed that Merrill Lynch allegedly engaged in "window dressing."

Here's how this particular scam works. A fund manager who is supposed to report his gains at the end of the quarter buys up a single share at an inflated price just before the market closes. The tick on the stock jumps at the close, and the fund manager gets to account for the stock at the higher price. It's an instant--and instantly vanishing--gain.

But don't worry. Merrill wasn't doing this for itself. It was just serving it's clients needs! (Who happened to be a fund manager who was cheating his clients.) Here's how the Australian describes it.

The Australian understands that Merrill Lynch was acting on behalf of a client, a small-cap fund manager.

In one instance, Merrill Lynch purchased one share in listed finance company Murchison Holdings at 2.49pm on September 30 for $1.50.

It was the only registered trade in the company that day and saw its share price close 19 per cent higher.

The broker's purchase of one Global Iron share for 22c saw the company's share price close 8c higher at 22c.

Other stocks traded by Merrill Lynch in a similar fashion include miners Graynic Metals, Nupower Resources, Austin Exploration, Primary resources, Natasa Mining, Red Metal, property company Ariadne Australia, and biotechs Heartware and Halcygen Pharmaceuticals.