Proving attempted or actual manipulation is pretty straightforward. The major challenge is proving damages. You have to prove that said manipulation actually moved the market and by how much. Not an easy thing. Then you have the issue of a 2-sided market. If you unwind positions - which could be an unholy mess of a job when considering all the potential matchings - you may make some traders better off, but you make others who did nothing wrong worse off.
There are essentially 2 types of damages:
1. The counterparty in the OTC transaction that lost our due to the manipulating parties criminal conduct.
2. The traders with strategies that were impact by the "manipulating party" during the period in question.
The (2) victims were impacted indirectly but they're still victims who suffered a financial loss. Driving markets counter to it's "normal" behaviour making it more predictable to them but less so to those who were in the market costs others money. That's why they do it, to take money away from other participants in the same market. The symbols, their trades, our trades are all logged and the regulators have the date/times and impact. I don't see why traders are exempt from damages, particularly the payment of such damages would reduce the likelihood of future manipulation.
The manipulation can be subtle, call-put parity means libor/forex manipulation can impact forex/rates markets. Unless their is more legal accountability it will remain a financially viable option for large FIs who only face arbitrary calculated fines rather than the real cost.
I suggest to begin with ISDA agreements need to a legal definition of a manipulated market so that the trades are voided if fixing periods were founded to be manipulated which would extend to trades through brokers.
Best,
A