Navinder Sarao, the UK trader accused over Wall Street’s “flash crash” in May 2010 and for destabilising the financial markets by placing huge volumes on “spoofing” trade orders to make personal gains, has lost his court challenge of an extradition order to the US.
Sarao was arrested in April 2015 at the request of US authorities who identified him as the initiator of the spoofing which helped cause the market panic in May 2010. He was consequently left facing a series of fraud charges.
After hearing the court’s decision today, Sarao’s lawyer, Richard Egan said, “we will definitely be appealing. We think we have still got a strong argument.”
In a legal battle that has lasted almost a year, the decision is now with the UK Home Secretary, Theresa May, who will make a ruling on whether to send Mr Sarao to the US within the next two months. Sarao’s legal team will then have 14 days to lodge an appeal at the high court.
Navinder Sarao was imprisoned for four months last year as he could not meet bail conditions due to his assets being frozen by the US authorities. Sarao has been charged in the US with 22 counts relating to market manipulation that come with a maximum sentence of 380 years should he be found guilty.
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US prosecutors have claimed that Mr Sarao dishonestly placed huge volumes of spoof trade orders and has therefore distorted the market. In a practice called “spoofing”, the market for S&P futures contracts triggered a massive crash leading to the biggest point drop in the Dow Jones index on May 6th 2010.
While a number of industry insiders doubt the impact of Sarao’s trade on the market, authorities say that he had a hand in destabilizing financial markets, leading to the third largest point swing in history (totaling 1018 points) of the Dow Jones Industrial Average.
Today’s court decision prompted an outburst from Sarao who protested, “How is this allowed to happen? I’m being punished for being good at my job”.
Sarao’s defence team backed him, adding that spoofing is not a crime under British law.
Sarao has been fighting extradition since being arrested in April 2015, when the police swooped on his family home in London.