'Flash crash' trader indicted by US grand jury
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Version 0 of 1. London day trader Navinder Sarao has been formally indicted by a US federal grand jury on charges of market manipulation that prosecutors say helped contribute to the 2010 “flash crash”, according to a court filing made public on Thursday. The Justice Department first announced criminal charges against Sarao in April and is seeking to have him extradited to the US to stand trial. He was released on bail at the end of August, but lawyers were unable to delay his extradition hearing, which is scheduled for late September. Prosecutors have accused Sarao of using an automated trading programme to “spoof” markets by generating large sell orders that pushed down prices. He then cancelled those trades and bought contracts at lower prices. The indictment contained the same criminal charges announced in the spring, including wire fraud, commodities fraud, commodity price manipulation and attempted price manipulation. But it revealed new details about how prosecutors claim Sarao sought the help of computer programmers to design a manipulative automated trading programme. It quoted from several emails Sarao sent to programmers in which he explicitly references spoofing behaviour. In a February 2009 email, for instance, the indictment claimed Sarao told a programmer: “If I am short I want to spoof it (the market) down, so I will place offer orders ... at the 1st offer and 2nd offer and an order ... into the 1st bid. These will not be seen.” Sarao was granted bail in April shortly after his arrest, but was not able to pay it because US authorities had frozen his assets. He was released in August. He is also facing parallel civil charges by the US Commodity Futures Trading Commission. |