Free Republic

Federal investigators probing the “flash crash” that briefly sliced nearly 1,000 points off the Dow Thursday are zeroing in on a series of “unusually high-volume” trades in S&P futures that originated in Chicago, a government official told POLITICO. Those trades set off a chain reaction of trades that caused the biggest drop within a single day in the Dow Jones Industrial Average’s storied history.

A UK trader accused of contributing to the 2010 Wall Street "flash crash" has protested his innocence in court, saying he did not "do anything wrong". Navinder Singh Sarao, 36, has been charged with wire fraud, commodities fraud and market manipulation by the US Justice Department (DOJ). Mr Sarao denies the charges but was remanded in custody for the third time after failing to raise £5.05m in bail. His lawyers' request that bail be lowered to £50,000 was refused.

The Justice Department on Tuesday unsealed charges, and sought extradition, of a Brit who did day-trading in futures contracts from his London home. The Commodity Futures Trading Commission also filed civil charges against Navinder Singh Sarao and his company. Sarao was arrested in the U.K. over the charges relating to manipulation. While the government has alleged manipulation on at least ten different occasions, it is the activity on May 6, 2010, that will draw the most attention. The U.S. government says Sarao was engaged in what’s called layering, which involves making multiple, bogus orders that are quickly cancelled to trick...