The U.S. Justice Department expanded its charges against Navinder Singh Sarao, the British trader accused of contributing to the 2010 flash crash in America, alleging his criminal behavior went on for longer than in the original complaint.
The amended indictment was revealed Friday at a London court, where an extradition hearing for Sarao was scheduled. The hearing was delayed until February because of the widened charges and the illness of one of Sarao’s lawyers.
Sarao was arrested in April at his house in London’s Hounslow neighborhood and spent the next four months in prison as his lawyers tried to negotiate his bail. Prosecutors allege he made $40 million over four years by spoofing CME Group Inc.’s stock futures market. They say he made a $900,000 profit on May 6, 2010, when a trading frenzy known as the flash crash saw almost $1 trillion briefly wiped from the value of U.S. equities. American authorities allege Sarao contributed to the mayhem.
Sarao was notified of the amended charges Thursday night. One of his lawyers, Joel Smith, said he was “disappointed” that the U.S. hadn’t given more notice.
Sarao would be “irrevocably hamstrung” if the hearing went ahead Friday without time to review the changes, especially because of his lead counsel’s absence, Smith said.
Lawyers for the U.S. complained about the five-month delay, calling it “depressing” that the hearing would take place nearly a year after Sarao’s arrest.
Prison sentences in the U.S. are often far longer than in the U.K. Sarao’s charges could add up to a 380-year sentence if convicted. While these kinds of sentences are rarely imposed, any jail time he served would still be away from his home country.
Sarao’s lawyers had been planning to undermine U.S. claims by arguing that his actions weren’t a crime in the U.K. and, as a British citizen, any trial should take place here.
“If you are facing a very difficult extradition battle, a delay is no bad thing,” said Alistair Graham, a London-based lawyer at Mayer Brown. “Although the stress and the strain will hang over him, he’ll have time to prepare the best possible defense.”