British Trader Charged in ‘Flash Crash’ Released After Bail Reduction
Navinder Singh Sarao, the British futures trader charged by United States authorities with contributing to a sudden plunge in American stock markets five years ago, was assigned a reduced bail at a court hearing on Friday, allowing him to be released from custody.
Mr. Sarao, 36, was arrested on April 21. Bail had previously been set at 5 million pounds, or about $7.8 million — an amount his lawyers argued would be impossible for him to obtain because his assets had been frozen by authorities after his arrest.
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A judge in Westminster Magistrates’ Court reduced Mr. Sarao’s bail to £50,000, which had already been posted by his family.
Mr. Sarao is fighting extradition to the United States, where he faces 22 criminal charges, including wire fraud and commodities manipulation. If convicted on all charges, he could face a prison sentence of more than 300 years. An extradition hearing is scheduled for next month.
Mr. Sarao is accused of helping to contribute to the so-called flash crash in May 2010, when American stock markets plummeted more than 1,000 points in a matter of minutes. Although the markets recovered their losses quickly, the event rattled investors and confounded regulators, who charged Mr. Sarao five years later with the help of an informant.
United States prosecutors accused Mr. Sarao of entering and withdrawing thousands of orders worth tens of millions of dollars each on hundreds of trading days, in an attempt to push down the price of futures contracts tied to the value of the Standard & Poor’s 500-stock index, a practice known as spoofing.
Prosecutors have said he made about $40 million through his trading from 2010 to 2014, according to the criminal complaint.
Mr. Sarao’s lawyers could not be reached for comment on Friday. But they had argued that his relatives had used their life savings to meet a court order requiring them to pay £50,000 of the bail, and had surrendered their passports.
Mr. Sarao — who had lived with his parents in Hounslow, a middle-class neighborhood near Heathrow Airport, his whole life and who does not own a car — would not put his family’s life savings at risk by fleeing, his lawyers said. Prosecutors had argued that he was a flight risk.
A judge denied a request for lower bail in May. At that hearing, Mr. Sarao proclaimed his innocence as he left, saying, “I am just good at my job,” and “I have done nothing wrong.”