Posted on 09/04/2015 11:58:35 AM PDT by Citizen Zed
US federal prosecutors are seeking the extradition of London-based day trader Navinder Singh Sarao on charges of market manipulation that they say triggered the May 6, 2010, “flash crash” in which the Dow lost 10 percent of its value in a matter of minutes.
Attorneys for Sarao could not be immediately reached outside of London business hours. The 22-count indictment details Sarao’s conduct between 2009 and 2014, charging him with fraud and market manipulation. The US levied the same allegations against Sarao in a criminal complaint earlier this year. This, the filing says, “would aid Sarao in implementing his scheme”. His product of choice: futures contracts on the Standard & Poors 500 Index, the benchmark gauge of US stock prices.
“Sarao’s large, bogus orders had a tendency to effect artificial movements in the E-Mini market price by creating a false appearance of substantial supply and demand”, it said.
The indictment, unsealed in Manhattan federal court Wednesday, cited a string of emails in which Sarao allegedly communicated about spoofing efforts with unidentified computer programmers who helped build custom-designed trading programs.
He initially faced technical difficulties in disguising the trading program and preventing his allegedly bogus orders from being executed before they were deleted, the indictment shows.
The court document includes emails that prosecutors say were exchanged between Mr. Sarao and a programmer, in which the trader discussed the use of software known as matrix. If prices approached those of his phantom orders, he wanted the software to withdraw them – what Sarao called cancel if close, according to e- mails summarized by US prosecutors. But questions remain about who was really to blame. The judge forced Sarao to reveal where he had hidden his money, and the west Londoner told the court he has £25.5m (€55.9m, $39.8m) locked away in Swiss bank accounts. He spent four months in a London prison while his lawyers contested his bail terms.
When Mr. Sarao was arrested in April, US authorities alleged that Mr. Sarao earned about $40 million in profits by using illegal trading strategies over several years and contributed to a “flash crash” on May 6, 2010, when stocks dropped swiftly before bouncing back.
-With assistance from Brian Louis and Nick Baker in Chicago.
Only the US feral government is allowed to manipulate the stock market.
Who are they going to indict for the current slowwww crash?-)
meanwhile they ignore HFT where the real damage occurs daily.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.