Indian-origin 'flash crash' trader Navinder Sarao indicted in US

LONDON: A London-based Indian-origin futures trader accused of triggering the 2010 Wall Street " flash crash" and making over $40 million from rigging the stock market has been formally indicted by a US federal grand jury.

Navinder Sarao, 36, who is currently out on bail while extradition proceedings are ongoing in UK courts, is suspected of spoofing, in which a phantom order is placed in an attempt to push shares up or down and then cancelled, so that an actual order benefits from the rise or fall in stock.

The US Justice Department had announced criminal charges against Sarao in April and is seeking to have him extradited to stand trial.

He was freed on bail last month after admitting that he had USD 25.5 million in a Swiss bank account, but his attempt to delay extradition was rejected last week and faces a September 25 extradition hearing in London.

Original court documents suggested Sarao was active between June 2009 and 2014, although the grand jury documents revealed he was emailing a computer programmer as early as January 2009 asking for help in building his trading platform and specifically mentioning spoofing, 'The Times' reported.

A month later he explained to the same programmer that the software should be designed so that "it is very easy for me to enter orders of varying different amounts. If I keep entering the same clip sizes, people will become aware of what I am doing, rendering my spoofing pointless."

A few days later he complained that it was not working.

The 22-count indictment details Sarao's conduct between 2009 and 2014, charging him with fraud and market manipulation.

Sarao was arrested in April at the home he shares with his parents near Heathrow Airport in west London.

He spent four months in a London prison while his lawyers contested his bail terms.