Trader to face custody hearing
A British financial trader accused of helping trigger a multibillion-dollar US stock market crash from his London home is due to appear in court tomorrow after failing to raise the cash needed to make bail.
Navinder Singh Sarao, who is fighting plans to extradite him to America to face trial, was granted bail at Westminster Magistrates' Court in London last Wednesday.
However the 36-year-old was told he would not be released until he provided security of £5 million and £50,000 from his parents as well as meeting other conditions.
A court official confirmed today that the full amount had not yet been received and he will appear at a custody hearing at the same court tomorrow.
The court heard last week that Sarao has £5 million in his trading account, of which £4.7 million is a loan.
He was arrested at the request of US authorities over the 2010 Wall Street "Flash Crash'', which he allegedly helped cause from his parents' semi-detached house 3,500 miles (5,630km) away in Hounslow, west London.
He is facing 22 charges including wire fraud, commodities fraud and market manipulation which carry sentences totalling a maximum of 380 years.
The US Justice Department claims Sarao and his company, Nav Sarao Futures Limited, made £26 million (40 million US dollars) illegally over five years.
Sarao was arrested last Tuesday at his home by officers from Scotland Yard's extradition unit on behalf of US authorities.
The former bank worker and Brunel University student told the court last week that he would fight plans to extradite him to America.
His defence lawyer, Joel Smith, said that criminality was ''not accepted in this case''.
''This is a matter that has come as something of a bolt from the blue for Mr Sarao,'' he told the hearing.
In court papers lodged in America, it is alleged that British-born Sarao claimed he told US regulators to ''kiss my ass'' in May 2010 after they wrote to him telling him his orders must be for ''bona fide transactions''.
He is accused of using an ''automated trading programme'' to manipulate the market for futures contracts on the Chicago Mercantile Exchange.
His alleged manipulation earned him significant profits and contributed to a major drop in the US stock market on May 6 2010 which came to be known as the ''Flash Crash'', US prosecutors have said.
Sarao is accused of placing multiple orders before cancelling them without executing them, causing prices to fall.
US prosecutors claim that when the prices fell, Sarao then sold futures contracts, only to buy them back at a lower price. Conversely, when the market moved back up as the activity ceased, Sarao allegedly bought contracts, only to sell them at a higher price, the US Justice Department said.
The Flash Crash saw the Dow Jones Industrial Average plunge 600 points in five minutes, causing tens of billions of pounds to be wiped off the value of US shares.
District Judge Quentin Purdy said Sarao's bail conditions included him living and sleeping at his home address with an electronic tag monitoring his curfew from 11pm to 4am, surrendering his passport and the passports of his parents, reporting to a police station three times a week, not using the internet and not attempting to leave England or Wales.
Sarao is due to appear at Westminster Magistrates' Court at 10am.