After losing his bid to avoid extradition from the UK, Navinder Singh Sarao – the British futures trader arrested and accused in connection with the stock market flash crash of May 2010 – is scheduled to make his first US court appearance on Wednesday.Mr Singh recently lost his legal challenge before the UK’s High Court to keep from being extradited to the US, where he faces 22 charges ranging from wire fraud to commodities manipulation.
He will be arraigned before US District Judge Virginia Kendall in Chicago federal court at 9:30 am local time, according to the court docket. A spokesman for the US attorney’s office in Chicago confirmed that Mr Sarao was in federal custody. A US lawyer for Mr Sarao did not immediately return a request for comment.
Mr Sarao, who hails from the west London suburb of Hounslow, was charged in April 2015 by US prosecutors with persistent spoofing, a practice in which a trader pushes market prices sharply in one direction and then profits from other investors following the pattern or exiting the market.
The alleged offenses took place in the market for E-Mini S&P 500 futures contracts – stock market index futures that track the benchmark S&P 500 – on the Chicago Mercantile Exchange.
His UK lawyer had argued that US prosecutors had not made clear that Mr Sarao’s activities would constitute a violation of the UK’s Fraud Act, and that Mr Sarao had used software called dynamic layering that was permitted in the US.
Nevertheless, the UK court rejected his request, setting the stage for Mr Sarao’s extradition.
US prosecutors have claimed that Mr Sarao contributed to the flash crash, one of the most spectacular moves ever seen in US equity markets on a single day.
On May 6 2010 the biggest US equity index, the S&P 500, plummeted 5 per cent before bouncing back 20 minutes later. Mr Sarao is accused of making a $900,000 profit that day, and $40m over four years by employing similar tactics. Prosecutors have frozen £30m of his assets, although some academics who have studied the crash have questioned whether his activity was at fault for the 2010 crash.
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