UK "Flash Crasher" Refuses To Be Broken Market Scapegoat, Will Fight Extradition Request Facing Decades In Prison

Tyler Durden's picture

While we eagerly await for the SEC to retract its official 104 page report summarizing the "Findings regarding the market events  of May 6, 2010" in light of "recent developments", and as we follow the shift in the official narrative to the outright bizarre, in which the entire Flash Crash is now blamed on just one man (as opposed to just Waddell & Reed as per the previous narrative), we learn that the latest scapegoat for a broken, fragmented and manipulated market, Navinder Sarao, is not quite so eager to go to minimum security prison in the US for doing what leads to a slap on the wrist when someone like Citadel or Virtu does it, and will challenge the CFTC's attempt to pin everything on him.

Bloomberg reports that Sarao, 36, was in London court earlier today following his after by British police for being charged in Chicago with 22 criminal counts including fraud and market manipulation and said he will fight an extradition request by U.S. prosecutors over his role in the 2010 flash crash.

As previoisly reported, Sarao engaged in what every other HFT firms on a daily basis: namely spoofing. However, because he is a foreigner, he was easy prey for the US "justice" system, and as a result it is he that has been picked as a scapegoat (perhaps because the official investigation into Virtu, Citadel and the other HFT firms revealed something so dramatic it needed an easy and available cover up).

In the US he faces up to several decades in prison: wire fraud is punishable in the U.S. by a maximum prison term of 20 years, commodities fraud by a sentence of as long as 25 years, and commodities manipulation and spoofing by terms of as long as 10 years, or a $1 million fine.

The strategy “virtually ensured” that his orders wouldn’t be filled, and Sarao almost always canceled his bids without executing them, the Justice Department complaint said.


CME, which runs the exchange where his trades took place, declined to comment Tuesday on the situation.

What are they going to say: "everyone else does it but please keep quiet", or that Sarao singlehandedly managed to smash the E-mini bidstack which also included every central bank on the bid side, because recall we now know that "Central Banks Trade S&P500 Futures."


So yeah, one single Brit managed to overpower every central bank on the bid side and crash the market.


And he did it all from here: quite literally his basement, perhaps while wearing pyjamas.

See if you can spot the massive array of microwave towers, fiber optic cables and laser transceivers next to his trading fortress.


Incidentally, those curious, here is his "188/289" block algo in action - it was observed years ago by Nanex. Apparently the combined SEC, CFTC, and DOJ did not have enough man and processing power to figure out what one single man did years ago.


Finally, since this ridiculous story will be around for a while, here is some further detail on the so-called Flash Crasher from Bloomberg.

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Eyeroller's picture

Manipulation is only a crime if it causes the market to go DOWN.

Croesus's picture

Unless you're talking about the Gold market. 



Haus-Targaryen's picture

Don'T forget silver. 

That naked 8 billion ounce paper short a few years ago is what did it.  

VinceFostersGhost's picture



I'm all in palladium. It's the future.


It's easier to get by the border guards.

bania's picture

We're all Flash Crashers now.

Whoa Dammit's picture

I don't think this guy is gonna roll over too easy. Heh.

In 2010 he was contacted again by the company he traded through in Chicago because 'it looks like he's deleting a huge amount of orders a second', an investigator said.

Sarao then responded and said he would 'like to apologise for any inconvenience caused by this' and added he 'was just showing a friend of mine what occurs on the bid side of the market almost 24 hours a day, by the high frequency geeks'.

The 36-year-old then pointed the finger at another trader and said: 'I see he continues to do this all day every day, yet you have a problem when I showed someone it for 5 mins?'

It emerged that the 36-year-old told CME Group Inc to 'kiss my ass' when they contacted him on the day of the 'flash crash' to remind him that all orders must be 'bona fide transactions'.

EscapeKey's picture

Remind me - how many people at Waddall & Reed went to jail?

RaceToTheBottom's picture

He should try his own case in the public realm.  Just put all the data out there, the more closed the proceedings are the less of a chance he has to survive.

turnoffthewater's picture

OMG!! ONE GUY!!!! did all that!?!


Your honor, I'd like to call NANEX to the stand

NoDebt's picture

I, for one, am glad they caught the one guy who has prevented us from having truly free and fair markets low these last 6 years.  I consider this era to now be finished and closed.  A new era of market renaissance is upon us.

asteroids's picture

Well if they do haul his pathetic ass into court, I hope he does the smart thing. During "discovery" he publishes the names and the trades of EVERY player during the crash.

Max Cynical's picture

Discovery is a two way street.

Freebird's picture

Yes this a huge relief...god bless our justice seeking law enforecment, just so that we can live safe & secure in the warm bosom of our glorious overlords.

Seasmoke's picture

Hey Croesus. How you doing. So you noticed that too. Jersey shore is still a mess. Don't believe the lies. 

SheepDog-One's picture

Or, manipulation is only a crime if a chosen lost......some chosen must have lost here big time.

golden torch's picture
golden torch (not verified) Eyeroller Apr 22, 2015 4:03 PM

I freelance over th? internet and earn about 80-85$ an hour. I was without a job for 7 months but last month my paycheck with big fat bonus was $15000 just working on my computer from my home for 5-6 hours. Here's what i have been doing...

stant's picture

Cheetos on the keyboard too

wrs1's picture

The real stupid money isn't in drilling for oil it's in financial investments of any kind including gold and silver.

Monetas's picture
Monetas (not verified) Apr 22, 2015 6:57 AM

Navin, the new phone books are out .... and you're in it !

chinoslims's picture

Flash crasher gets prosecuted?  Corzine, Bush, Bernanke, Yellen and Obama don't get shit.  WTF

firstdivision's picture

You gotta be willing to suck the Rothschild dick if you want to get away with illegal activities.  This guy refused to suck and swallow the Rothschild juice, in which case he is a criminal.


How about he requests trading records for with week of March 6th 2008 from all exchanges with originating firms names on them....that'd be where all the fun begins.

turnoffthewater's picture

Didn't this happen the day before Goldman was to testify before a senate hearing?

timeless21's picture

He can now calmy say that I have provided liquidity

ozzzzo's picture

Thank you for using a spell checker. Unfortunately you still need to proofread before publishing if you want to maintain any credibility. This type of careless error calls into question how much time you spent checking your facts:

"following his after by British police"

buzzsaw99's picture

too bad his name isn't cohen or corzine or clinton

VinceFostersGhost's picture



I asked Bill to say a few words.


He stuck me with a bill for 100K.

Colonel Klink's picture

Or -berg, -witz, -stein, fink, gold-, silver-, green-, bernanke, well you get the idea.

Barry McBear's picture

The difference between what he did and what Citadel and Virtu do is he manipulated the market down.  Citadel and Virtu manipulate it up.  One gets rewarded, one gets punished.

DavidC's picture

Sararo should be employed by Goldman, he's such a genius.

Working on his own...

In his basement...

In his pyjamas..

Genius, I tell you.


buzzsaw99's picture

sergey stole software that could be used to manipulate "the market" from the squid (they said this in a public statement). he went to jail. the squid kept using the market manipulating software. that's justice in america.

Number 156's picture

Wow!!! So this guy had a dozen servers and an 'Express Direct' line connected to NYSE out of his four bedroom house? He must have made billions. </s>


Jonesy's picture

Oh, this GOY is going to pay, and if he still thinks Britain is a different nation with it's own set of rules to protect him then he's not as smart as he sounds.  Laws are for GOYIM, doesn't matter where they live, they are accountable to the borderless JWO.

buzzsaw99's picture

yep. if he were a joo he could have done 9/11 for the insurance money and gotten away with it.

williambanzai7's picture


If you are a dark skinned man, you better not play the white man's "game".

Barry McBear's picture

What about the front running algo's that actually sold the market based on his sell orders higher up in the book?  I mean that's basically what he was manipulating right?  Shows some size to sell and gets frontran.  So the CME wants all our orders to be legit so the frontrunners can only front run legitamite orders?  LOL


buzzsaw99's picture

this confirms my suspicion why markets can only go higher. HFTs can't front run a down market or they go to jail.

SheepDog-One's picture

wow someone bigger than a whale and way to big to suffer any loss is still butt hurt about 2010 flash crash....they must have lost a big chunk.

all in capital's picture

seeking clarity can I have a sell order and a buy order at the same time for the same security or not?

Racer's picture

Buy orders are fine, however you will be arrested if you try to sell anything

all in capital's picture

thx - thought so but in order for me to buy something I have to sell 

GMadScientist's picture

It's called margin. Dig deeper.

Racer's picture

Most houses in the UK don't have 'basements'

cherry picker's picture

The little guy always takes the fall.

Solution is simple, outlaw computer trading.

You want to buy and sell stocks, fine.  Do it manually.  Enter your bids as if it were EBay.

Simple fix and let this guy go.  His crime is miniscule compared to Congress's and DC crimes.

twh99's picture

Rick Santelli had a better idea.  Charge a tax or fee for cancellations.

I have one better, charge a fee or tax for every transaction, completed or not.  The HFT firms would then have to figure out whether their manipulations are worth the cost.

ozzzzo's picture

After googling around I realize that this article is complete garbage. Why didn't you mention the connection to MF Global? Could it be that you are just regurgitating a single news story? ZH has some excellent articles but stuff like this erodes your credibility.

NoDebt's picture

Post it up.  It would enhance YOUR credibility and do the board members here a service.

22winmag's picture

If Obama or Clinton won't pardon this guy, I'm sure Rubio will if the price is right.

Captain Willard's picture

Who was this guy's broker? i guess they didn't notice his order patterns. BS. The broker is as guilty as this poor slob.

Why not just change the margin rules such that you cannot place more orders than your portfolio leverage limit? Even at 100:1 for futures, he probably wouldn't have had enough equity to place all these orders.


thismarketisrigged's picture

this guy should fight extradition, and these charges that are being sought against him.


if blankfein, dimon, bernanke, yellen, draghi, greenspan, bank of japan, kevin henry, etc can all manipulate ''markets'' every fucking day for years and years without having anything done to them, why should this guy be different?


if manipulating ''markets'' is a crime, arrest the fucking right people, not this guy who is just a scapegoat for these criminals.

Keltner Channel Surf's picture

First London Whale, then London Goat, zookeeper jobs to require advanced math & computer science degrees.