'Flash crash' trader's extradition hearing put back amid new claims

Storm clouds

The extradition hearing of Navinder Singh Sarao, the British trader accused of contributing to a so-called flash crash in financial markets, has been put back until February.

The London-based trader, who is accused by the US authorities of market manipulation, appeared in Westminster magistrates court for what was expected to be a hearing into his possible extradition.

Sarao, arrested by British police on a US warrant in April, has been indicted by a federal grand jury on 22 criminal counts including wire fraud, commodities fraud, commodity price manipulation and attempted price manipulation.

The hearing was put back after the court heard that Sarao’s barrister, James Lewis QC, had injured himself when leaving home on the morning before the court hearing. A new extradition request was also presented to the court by Mark Summers QC, for the US government, extending the dates of the allegations by six months.

Judge Quentin Purdy told Sarao he should have time to prepare in light of the new dates and set 4 and 5 February for the new hearing.

The former bank worker and Brunel University student, who lives and worked at his parents’ modest home in Hounslow near Heathrow, is accused of using an automated trading program to “spoof” markets by generating large sell orders that pushed down prices. He then cancelled those trades and bought contracts at lower prices, prosecutors say.

The flash crash saw the Dow Jones industrial average briefly plunge more than 1,000 points on 6 May 2010, temporarily wiping out nearly $1tn in market value.

US prosecutors say his criminal activities netted him about $40m profit and if convicted he faces a long jail term – the maximum sentences for the charges amount to hundreds of years in prison.

The 36-year-old has already spent four months behind bars after failing to meet £5m bail terms because his assets had been frozen. He was finally released earlier this month after US authorities agreed he could be released on bail of £50,000.

Sarao denied any wrongdoing in May, telling the court: “I’ve not done anything wrong apart from being good at my job.”

The court has been told that despite his modest lifestyle, he had funds of more than £30m, including £25.5m held in Switzerland and £5m in a US escrow account.

Sarao spoke only to confirm his name, age and address and to say that he did not accept extradition. His counsel Joel Smith said the legal team had only been informed of the new extradition warrant on Thursday night.

“Mr Sarao is understandably distressed. His mental health is fragile. It adds to the stress and strain these proceedings have put on him,” Smith said.

The case has been adjourned until October 22 for legal argument ahead of the hearing in February.

Powered by Guardian.co.ukThis article was written by Shane Hickey, for theguardian.com on Friday 25th September 2015 12.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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