Arguably, market makers would violate this law by setting bid and ask prices and making trades with themselves and each other. However, their purpose is something other than deceiving investors about some hypothetically true value of a security - it is to maintain constant liquidity and price discovery. I suspect the law was written more for pump-and-dump scams than self-trading. E.g. buying and selling between one's accounts to create a false market price on a penny stock so that some sucker who got your fax pays you five pennies for it.
I guess the question is, could a person be acting as a market maker? Could you sell these options to yourself for a penny and that would arguably be the lowest tradeable value so you haven't inflated the price? (And with options, there is always a chance that the option will rapidly appreciate, no matter how far out of the money, so who is to say a penny is too much to pay / a false price for a lotto ticket?)
The answer is almost certainly no.
IRC 4975(c)(1)
(c) Prohibited transaction
(1) General rule. For purposes of this section, the term “prohibited transaction” means any direct
or indirect—
(A) sale or exchange, or leasing, of any property between a plan and a disqualified person;
(B) lending of money or other extension of credit between a plan and a disqualified person;
(C) furnishing of goods, services, or facilities between a plan and a disqualified person;
(D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan;
(E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or
(F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan
Even if you run it through a broker and the purchaser could in theory be anybody, it seems like that would be an indirect sale to yourself.