UK trader to claim he is ‘scapegoat’ in US extradition fight

The trader accused of playing a role in the “flash crash” of 2010 has indicated the main arguments he will use to fight his extradition to the US, including that he has been wrongly “scapegoated”.

Navinder Singh Sarao, 36, who is fighting an attempt by the US authorities to extradite him to trial in Chicago, is still in custody and appeared at Westminster magistrates' court on Thursday by video link from Wandsworth prison.

According to an opening note submitted to the court by a lawyer for the US authorities, Mr Sarao has indicated the arguments he is likely to use to oppose his extradition at a two-day hearing in September.

These include an argument that he has been “scapegoated” and did not contribute to the “flash crash” and so the extradition constitutes an abuse of court process.

According to the opening note, his other arguments are likely to be that he has ties to the UK, a substantial measure of his conduct occurred in the UK and so “the appropriate forum for any prosecution is the UK”.

The opening note submitted to the court by Mark Summers QC, representing the US authorities, also says that Mr Sarao has indicated he will argue that extradition would breach his human rights by exposing him to a “grossly disproportionate sentence of imprisonment”.

His arguments are likely to say that in respect of his actions before April 2013, his conduct fails to meet the dual criminality requirements of the extradition law.

A further bar to his extradition could include his mental health — although the opening note says this is “ unparticularised” and “pending receipt of a medical report”.

The US authorities allege in the opening note that the losers “as a result of the defendant’s conduct were individuals and trading firms within the United States”.

Mr Sarao had to appear by video link from Wandsworth prison on Thursday afternoon after he failed to arrive by prison van at Westminster magistrates for a morning case management hearing. He had already appeared at the same court on Tuesday.

He has been granted bail subject to raising £5m but he has been unable to raise the money as his assets are subject to a worldwide freezing order imposed by the US authorities. He has been in custody for the past 10 weeks.

His legal team failed to get the High Court to overturn the £5m bail condition after the US authorities argued that Mr Sarao was a “quintessential flight risk”.

Mr Sarao whose businesses were registered at his parents’ modest home close to Heathrow airport has been charged by the US Department of Justice with wire fraud, commodities fraud and market manipulation over a period of several years.

He is facing 22 charges, which carry sentences totalling a maximum of 380 years and the justice department alleges he made £26m illegally over five years.

The former Brunel University graduate and bank worker had already said in court that he would fight extradition.