Accused UK 'flash crash' trader to be extradited to U.S.

Reuters News
Posted: Oct 14, 2016 8:03 AM

LONDON (Reuters) - A London-based trader accused of contributing to the 2010 Wall Street "flash crash" by placing bogus orders to spoof the market lost a legal appeal against extradition at the High Court in London on Friday and will now be sent for trial to the United States.

Navinder Sarao, who traded on the Chicago Mercantile Exchange (CME) from his parents' home near Heathrow airport, will be extradited within 28 days.

Sarao, 27, is wanted in the United States to face trial on 22 criminal counts of wire fraud, commodities fraud and market manipulation. He denies any wrongdoing.

U.S. authorities say Sarao used a modified computer program to "spoof" markets by generating large sell orders that pushed down prices. He then canceled those trades and bought the contracts at the lower prices, reaping a roughly $40 million profit.

His actions, they allege, contributed to market instability which led to the May 6, 2010 flash crash when the Dow Jones Industrial Average briefly plunged more than 1,000 points, temporarily wiping out nearly $1 trillion in market value.

The maximum U.S. sentences for the charges he faces amount to more than 350 years in prison.

(Reporting by Michael Holden; editing by Stephen Addison)