‘Flash crash’ trader takes extradition case to appeal

Navinder Singh Sarao: the US claims he made illusory trades to nudge the market in his favour
Navinder Singh Sarao: the US claims he made illusory trades to nudge the market in his favour Credit: Bloomberg

The Hounslow trader who is fighting the United States’ claims that he placed spoof bets on the market is to take his appeal against extradition to the High Court next month.

Navinder Singh Sarao, 37, was first arrested in April 2015 on charges linked to his trading activity from the bedroom of his family home in west London.

The FBI and US markets watchdog allege that he made illusory trades designed to nudge the market in his favour as far back as 2009.

His case has attracted particular attention over the claim that he made major high-speed bets in the minutes before the “flash crash” in 2010, which sent the Dow Jones stock index on a hair-raising 1,000-point swing.

The exact cause of the crash is disputed, although the regulators initially pointed to instability in the S&P derivatives markets, where Mr Sarao is alleged to have made prolific offers with no intention to make good on the trades.

Mr Sarao has challenged attempts to send him to the US to face trial, and will appeal against the UK justice system’s approval of his extradition in the High Court on October 14.

Theresa May, Home Secretary at the time, signed off his extradition in May after several rounds of court hearings between the US and Mr Sarao.

The 22 charges against the Londoner, including fraud allegations, come with a maximum sentence of 380 years if he is found guilty. He also faces civil charges.

He spent four months in Wandsworth prison after his arrest, but was bailed after allowing investigators access to his accounts in Switzerland and elsewhere that held around £26m.

Since a new treaty was signed in 2003, the US authorities only need to allege reasonable suspicion of criminal activity, rather than prove the crime, in order to extradite a suspect.

The market where Mr Sarao traded online, the Chicago Mercantile Exchange, is on US soil, and the regulators have contended that many of the investors that lost out as a result of his bets were American.  

The new extradition rules have been challenged several times, including in the case of Gary McKinnon, a computer hacker whose extradition was blocked in 2012 over fears for his health.

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