The Briton blamed for contributing to the May 2010 Wall Street flash crash maintained frenetic relationships with a series of brokers, banks and software firms that appear to mirror his rapid-fire trading activity, US court documents have shown.
Navinder Singh Sarao, 36, was arrested in London on criminal charges this week, and authorities have sought to link his trades to the flash crash, when about $1 trillion was briefly wiped out from US stock markets in a matter of minutes.
Sarao, who has been charged in separate civil and criminal complaints in the US, was granted bail in London on strict conditions, including a £7.5 million bond. A lawyer for Sarao contacted by Reuters on Thursday declined to comment on whether the trader had yet been released on bail. He has said he opposes extradition to the United States for trial.
Court documents released Thursday in the civil complaint by the US Commodities Futures Trading Commission, show he appeared to juggle millions of dollars at a time through the global banking system between the British West Indies, the Middle East and Switzerland.
Operating his one-man shop from his parents’ house in a working-class London suburb miles from the financial district, Sarao is accused of using an automated program to “spoof” markets by generating large sell orders that pushed down prices. He then cancelled those trades and bought the contracts at the lower prices.
Sarao’s trading reaped him a profit of roughly $40 million, authorities allege, though he showed few, if any, signsof wealth. But he apparently was not shy about his trading prowess.
In 2007 he sent an e-mail to Doubledown Media – the now-defunct publisher of Trader Monthly – inquiring about joining the ranks of the now-shuttered magazine’s “30 Under 30” list. He claimed that on an average trading day he could make $133,000.
Sarao also boasted to the UK’s Financial Conduct Authority that he had always been quick with the computer mouse, but that he was still an old-school trader.
Sarao was able to place and then cancel orders at a rapid pace through the use of software designed to do just that.