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UK Citizen in Jail for Causing "Flash-Crash", or Just High-Frequency Trading?

posted by n1 on Sunday May 24 2015, @02:11PM   
from the justice-is-blind dept.

Whoever writes:

Nainder Sarao sits in jail because he cannot raise the £5M bail that is required for his release. He has apparently made millions while living in his parents' basement, but doesn't have access to the money because his accounts have been frozen. What is claimed by US authorities is that "... Mr Sarao placed "spoof" trades in E-Mini S&P derivatives in a bid to push the market in his favour. The orders would be placed and withdrawn in rapid succession using a customised computer programme, they allege", which sounds a lot like high-frequency trading. Perhaps his real crime was to copy the techniques of wealthy high-speed traders?

• More information More information (Score: 4, Informative) by n1 on Sunday May 24 2015, @02:29PM

  by n1 (993) on Sunday May 24 2015, @02:29PM (#187163) Journal

  The Wall Street Journal reports [wsj.com]:

  Navinder Singh Sarao, the trader arrested last month on U.S. charges he manipulated futures prices and contributed to the May 2010 “flash crash,” leveled claims of similar misconduct against other traders before his arrest.

  Mr. Sarao complained to the Chicago Mercantile Exchange, where he traded futures contracts, more than 100 times over the past several years about traders he believed were engaging in manipulative conduct, people familiar with the matter said.

  His last complaint came just weeks before he was arrested on Justice Department charges, one of the people said.

  [...]The volume of the complaints, which came as frequently as every few weeks and identified specific moments in which he believed traders had violated rules, suggests Mr. Sarao was familiar to CME investigators, who had flagged his trades as suspicious as early as 2008, according to the Justice Department complaint.

  While the CME generally follows up on complaints from market participants and investigates activity its systems flag as suspicious, it is unclear whether the CME took specific action on Mr. Sarao’s complaints.

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• Re:More information (Score: 0) by Anonymous Coward on Sunday May 24 2015, @04:33PM

  by Anonymous Coward on Sunday May 24 2015, @04:33PM (#187188)

  who had flagged his trades as suspicious as early as 2008

  So he was on their radar for at least two years before he "flash crashed", and they didn't do anything about his trades? Then they waited almost five years before they arrested him for the 2010 "flash crash"?

  I think Willie Sutton [wikipedia.org] should have become a banker. Then he never would have been arrested.

  Parent