'Flash crash' trader to be released on bail

Michael Lewis - Flash Boys

The British financial trader accused of contributing to a multibillion-dollar stock market crash is to be released after being granted bail.

Navinder Singh Sarao, 36, who was fighting extradition to the US on 22 counts of fraud and commodity manipulation, was granted bail at Westminster magistrates court on Friday morning. As a condition of his bail Sarao must remain within the bounds of the M25. The amount of his bail was reduced from £5m to £50,000.

It emerged in the hearing that Sarao has funds of more than £30m, including £25.5m held in Switzerland and £5m in an escrow account controlled by his lawyers in the US. Sarao’s lawyers are trying to transfer the Swiss funds into the US account, in order to provide surety to US authorities that he will not skip bail. However, the Swiss authorities cannot release the majority of funds until 2017 at the earliest, with the exception of £5m that will be transferred to the escrow account in October.

Sarao, who has been diagnosed with Asperger’s syndrome, denies the charges against him. He was refused bail at an earlier court appearance in April but following a hearing on Friday was granted permission to leave Wandsworth Prison in London.

James Lewis QC, representing Sarao, argued that his client needed to be released from jail to present evidence to an expert on his trading activities. Sarao is accused of playing a role in the so-called “flash crash” on 6 May 2010 when the Dow Jones Industrial Average plunged 600 points in five minutes. The US Department of Justice has claimed that Sarao made $40m (£25bn) by “spoofing” financial markets, using trading software to make false buy and sell orders.

Flash crash

Lewis said the matter was “horrendously complicated”. He added: “I must admit I have not fully understood it.” Sarao’s representative said the search for legal experts to bolster his case had been difficult because of the “risible” legal aid fees on offer to expert witnesses. Lewis added that he wanted Sarao to tell an expert how he had made his trades, which was not possible from Wandsworth Prison.

The magistrate, Quentin Purdy, rejected Lewis’s request to delay the extradition hearing – scheduled for 24 and 25 September – but agreed to grant Sarao bail and limited access to the internet.

Sarao’s lawyers will have the opportunity to request a delay in the extradition hearing at a further court hearing on 28 August.

Powered by Guardian.co.ukThis article was written by Jennifer Rankin, for theguardian.com on Friday 14th August 2015 12.46 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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