A British man who U.S. prosecutors say contributed to the 2010 flash crash on Wall Street has told a London court that he opposes extradition to the U.S.
Navinder Singh Sarao, 36, was freed today on bail of more than £5 million (about $7.5 million). He was charged Feb. 11 in a federal criminal complaint in the Northern District of Illinois with one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation, and one count of "spoofing," an act that involves bidding with the intent to cancel before the bid is executed. (You can read the criminal complaint against him here.)
U.S. prosecutors say Sarao's trading practices earned him $40 million in illegal profits from 2010 to 2014. They say he made almost $900,000 on May 6, 2010, the day of the "flash crash."
The "flash crash" wiped about 600 points from the Dow Jones industrial average in mere minutes, leading to about an $800 billion loss; the market recovered almost as quickly. (You can read a timeline of what happened that day on The Wall Street Journal).
The BBC reports on today's court proceedings: "Mr Sarao must pay £5m and his parent's must pay £50,000. The conditions of bail state that he must live and sleep at his parents address in Hounslow, west London, each night, he cannot travel internationally and cannot use the internet."
The case was adjourned until May 26.
Sarao was arrested Tuesday in London. His lawyer called the developments "a bolt from the blue."
Bloomberg has more on the man:
"Sarao has no record of having worked at a major financial firm in the U.S. or the U.K. At the time of the flash crash, Sarao was renting space from a proprietary-trading firm and clearing his transactions through MF Global Holdings Ltd., the now-defunct firm headed by Jon Corzine, said a person with knowledge of the matter. One of Sarao's neighbors in Hounslow, 11 miles from central London, said what neighbors so often say: He was quiet, kept to himself, never caused trouble."
The Guardian, in its story, interviewed neighbors who called Sarao a "bright kid" from a modest family.
Bloomberg notes Sarao used off-the-shelf software he later asked to be modified to place and cancel his orders.
At the time of the crash, it was believed that a unnamed trader at mutual fund company Waddell & Reed had placed an order that led to the dive in stocks.