Flash Crash Trader Headed to U.S. After Losing Final Appealby
Navinder Singh Sarao will be sent to U.S. in the next 28 days
Sarao is accused of making $40 million from spoofing markets
Navinder Singh Sarao, the British trader accused of making $40 million spoofing markets from his bedroom, will be extradited to the U.S. to stand trial.
Sarao’s final request for permission to appeal his extradition was rejected by judges in London Friday. He must be sent within 28 days to the U.S. where he faces 22 charges of fraud and market manipulation. He wasn’t in court for the hearing.
The extradition ruling marks the end of an 18-month battle waged by Sarao, 37, after he was arrested at his London home in April 2015. He is accused of spoofing CME Group Inc.’s stock futures market over five years, including on May 6, 2010, when a trading frenzy known as the ‘Flash Crash’ briefly wiped almost $1 trillion from the value of American equities.
He faces a 380-year jail sentence if he’s convicted on all counts, though in reality that number is more an indication of the severity of the alleged crimes than the actual sentence he would receive.
Sarao’s lawyers declined to comment after the hearing. Ahead of the ruling they argued the U.S. hadn’t properly outlined the charges against him, particularly in regard to his intentions when trading.
"The fact the request is silent on what is being communicated is fatal to making out a fraud case," said James Lewis, an attorney representing the trader. It’s “not a fair and accurate," description of what the U.S. is alleging.
But the two U.K. judges rejected Sarao’s request, ruling on the petition within five minutes of the lawyers wrapping up their arguments.
"This case underlines how difficult it is to resist extradition to the U.S.," said Thomas Garner, a London lawyer at Gherson, who wasn’t involved in the case. "Critics of the U.K.’s extradition relationship with the U.S. will see this as another example of the U.S.’s reputation for an aggressive long-arm approach to law enforcement."
Sarao’s case grabbed headlines around the world as people struggled to grapple with the idea that a single day trader could make so much money, often working from his bedroom in a house he shared with his parents, and that his behavior could be linked to the Flash Crash. He spent four months in prison last year as he tried to secure bail, eventually winning his release by disclosing he had about 25 million pounds ($30.5 million) of assets in Switzerland.
Judge Peter Gross said Friday it was "unfortunate there was so much publicity" over the Flash Crash link because the charges covered five years of alleged spoofing.
His lawyers previously tried to undermine the U.S. case by arguing his actions weren’t a crime in the U.K. and, as a British citizen, any trial should take place in England. The prosecution countered that while Sarao was in the U.K., most of the damage was on an American trading platform.
In the ruling against Sarao, handed down by a lower court in March, Judge Quentin Purdy said that while there’s no known U.K. prosecution for spoofing, that didn’t mean the behavior wasn’t a criminal offense under English law.
"It was American individuals, American companies and the American market integrity as a whole that suffered in this case," Mark Summers, a lawyer for the prosecution, said in court Friday.