From wikipedia:

A wash trade (not to be confused with a wash sale) is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments. This may be done for a number of reasons:

• To artificially increase trading volume, giving the impression that the instrument is more in demand than it actually is.[1]
• To generate commission fees to brokers in order to compensate them for something that cannot be openly paid for. This was done by some of the participants in the Libor scandal.[2]
• Some exchanges now have protections built in, sometimes mandatory for participants, such as STPF (self-trade prevention functionality) on The ICE.[

And then there's this from the WSJ:

U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions, according to people familiar with the probes.

http://www.wsj.com/articles/SB10001424127887323639604578366491497070204