LONDON (Reuters) - A London-based trader accused of contributing to the 2010 Wall Street “flash crash” by placing bogus orders to spoof the market lost his legal bid to stop extradition on Friday and will now be sent to the United States to face trial.

Navinder Sarao arrives at Westminster Magistrates' Court for an extradition hearing in London, Britain March 23, 2016. REUTERS/Toby Melville

Navinder Sarao, 37, who traded on the Chicago Mercantile Exchange (CME) from his parents’ home near Heathrow airport, is wanted by the U.S. authorities on 22 criminal counts of wire fraud, commodities fraud and market manipulation.

He has denied any wrongdoing and in his only public comment said he was just good at his job.

A judge initially approved his extradition in March, and on Friday his bid to launch an appeal against that decision was rejected, ending his 18-month legal fight. He will now be extradited within 28 days.

U.S. authorities say Sarao used a modified computer program to “spoof” markets by generating large sell orders that pushed down prices. He then canceled those trades and bought the contracts at the lower prices, reaping a roughly $40 million profit.

They say his actions contributed to market instability which led to the May 6, 2010 flash crash when the Dow Jones Industrial Average briefly plunged more than 1,000 points, temporarily wiping out nearly $1 trillion in market value.

Sarao’s lawyers have argued that experts have ruled out his actions as being responsible for the flash crash, and in his ruling in March, judge Quentin Purdy also cast doubt on the role the trader is alleged to have played.

However, Purdy added the flash crash was just one of the 400 trading days referred to by U.S. prosecutors when Sarao was said to have been spoofing the market.

If found guilty, the maximum U.S. sentences for the charges he faces amount to more than 350 years in prison.

But in July, a U.S. judge sentenced futures trader Michael Coscia to three years in prison after he became the first person criminally convicted of spoofing, a lighter punishment than prosecutors had sought.</s>A London-based trader accused of contributing to the 2010 Wall Street "flash crash" by placing bogus orders to spoof the market lost a legal appeal against extradition at the High Court in London on Friday and will now be sent for trial to the United States.

Navinder Sarao, who traded on the Chicago Mercantile Exchange (CME) from his parents' home near Heathrow airport, will be extradited within 28 days.

Sarao, 27, is wanted in the United States to face trial on 22 criminal counts of wire fraud, commodities fraud and market manipulation. He denies any wrongdoing.

U.S. authorities say Sarao used a modified computer program to "spoof" markets by generating large sell orders that pushed down prices. He then canceled those trades and bought the contracts at the lower prices, reaping a roughly $40 million profit.

His actions, they allege, contributed to market instability which led to the May 6, 2010 flash crash when the Dow Jones Industrial Average briefly plunged more than 1,000 points, temporarily wiping out nearly $1 trillion in market value.

The maximum U.S. sentences for the charges he faces amount to more than 350 years in prison.</s>The British financial trader accused of manipulating the US stock markets on the day of an $800bn (£565bn) “flash crash” faces extradition within 28 days after being denied permission to appeal against the order.

Navinder Singh Sarao, 37, nicknamed the Hound of Hounslow, must now be sent to America and surrendered to the US authorities.

After a two and a half hour hearing at the court of appeal in London on Friday, Lord Justice Gross and Justice Nicol denied a renewed application to appeal against extradition. Their reasons are to be given at a later date.

The counsel for the US acknowledged there was no longer a suggestion that Sarao had played a significant role in provoking the flash crash.

During the 36-minute crash, on 6 May 2010, the Dow Jones industrial average plummeted by 998.5 points – its biggest slump during a single trading session.

“This is a case about the ‘spoofing’ of the US market over five years,” counsel for the US told the high court. Spoofing is the placing of an electronic order on an exchange with the intent of giving others a false impression of market demand.

After the price reacted to that alleged deception, Sarao, who traded from his parents home in west London, is alleged to have bought or sold stock knowing he could cancel the spoof order. He is accused of making $40m from spoofing between 2009 and 2014.

Revising allegations concerning links to the flash crash, counsel for the US said: “This case is connected to the flash crash in that he was trading on the day in question.” It is accepted, however, that he had ceased trading minutes before the crash.

All legal options for Sarao in the UK have been exhausted and he must stand trial in the US on 22 counts of wire fraud, commodities fraud and market manipulation carrying a maximum combined sentence of 380 years’ imprisonment.

The initial extradition ruling was made by district judge Quentin Purdy at an extradition hearing at Westminster magistrates court in March.</s>A British financial trader accused of helping trigger a multibillion-dollar Wall Street crash from a suburban UK home is mounting a high court challenge against a decision that he can be extradited to the US to stand trial.



Navinder Singh Sarao, 37, nicknamed the Hound of Hounslow, is wanted in America over allegations that he helped cause the 2010 Wall Street “flash crash” from his parents’ home 3,500 miles away in Hounslow, west London.

He faces 22 charges, which carry sentences totalling a maximum of 380 years, over claims that he contributed to the Dow Jones Industrial Average plunging 600 points in five minutes, wiping tens of billions of pounds off the value of US shares.

US authorities claim Sarao made $875,000 (about £716,000) on 6 May 2010, the day of the crash, part of illegal earnings of more than $40mover a five-year period.

At an extradition hearing at Westminster magistrates court in March, the district judge, Quentin Purdy, ruled that Sarao could be sent to stand trial in the US.

Lawyers for the former bank worker and Brunel University student argue that his actions did not constitute a crime.

In his ruling, Purdy said: “The causes of the flash crash are not a single action and cannot on any view be laid wholly or mostly at Navinder Sarao’s door, although he was active on the day. In any event this is only a single trading day in over 400 relied upon by the prosecution.

“Essentially, has the US established that the same actions in this jurisdiction at the same time would be capable of being prosecuted for one or more offences known to the criminal law? This is not the forum for testing the evidence as in a trial. To my mind, when all is said and done, the US are correct in arguing they have shown dual criminality.”

Sarao, who is on bail, will have his challenge heard by Lord Justice Gross and Mr Justice Nicol at a hearing in London.
A London-based trader who traded on the Chicago Mercantile Exchange, Navinder Singh Sarao, accused of contributing to the 2010 Wall Street "flash crash" by placing bogus orders to spoof the market, fails in his legal bid to stop extradition and will now be sent to the United States to face trial where he is wanted by U.S. authorities on 22 criminal counts of wire fraud, commodities fraud, and market manipulation. A judge initially approved his extradition in March, and today his bid to launch an appeal against that decision was rejected, ending his 18-month legal fight. He will now be extradited within 28 days.