I've made a dozen socks with the magic loop method and tried everything to stop the ladders, I even "invested" in the Magic Loop book to see if there was a secret there that would help. The book even mentions that you should not pull too tighly on the first stitch since the last is already on the thin cable part of the needle and will automatically tighten when you slide it back onto the needle. That actually helped a bit.
The first socks I did with this method were ribbed at the cuff, to the heel, and then a plain stockingette stitch and the ladders were obvious, I then switched to a different pattern with a ribbing and cable that runs down the cuff and the front of the sock and found the ladders were nearly invisable against the edge of the cable stitch, I'm sure if the ribbing continued down the front that would help also the ladders are far less obvious against the ribbing.
I love the method! My socks never slide off of the needles in my little sock bag and there's no fussing with a tangle of circular needles like the two cable method. I experimented because I really wanted to make the method work and I'm perfectly happy with it since I changed the pattern somewhat.
Hope that helps!