By "pumping and dumping" do you mean "buying and selling" to outsmart other people trying to outsmart them?

Did they lie about the financial health of the securities they traded?

You could just read the article.

This is outside my domain, and I don’t know the details, but in many cases Jane street functions as a market maker, market makers have access to information they can exploit to skim from anyone that trades through them, especially retail investors who place market orders.

Pump and dump is a strategy that whales can use to bully smaller traders, not unlike how in poker the smaller your stack is in relation to the minimum bet, the easier it is for someone with a big stack to squeeze you out. This is possible for whales even when they don’t have access to the information that market makers have, and it’s not allowed on many regulated exchanges.

It’s like the reverse of the GameStop short squeeze, except instead of retail investors ganging up, propping up the price to liquidate institutional short positions, it’s an institution using its fat stacks to cause little crashes which they have opened short positions to exploit.

One arm of the firm creates a waves in the price, and the other arm rides the wave.

Please correct me if I’m wrong.

Js manages trades for huge whales that can move markets by themselves.

So yes it is textbook insider trading if you are placing options just before you move the whale.