The British trader nicknamed “the Hound of Hounslow” has committed no crime in Britain and should be freed from the threat of extradition, a court heard today.
Navinder Singh Sarao, 37, is wanted in the US over allegations he helped cause the 2010 “flash crash” on Wall Street from his parents’ home in Hounslow, 3,500 miles away.
But the extradition demand issued by US authorities is full of “misleading and inaccurate submissions”, the court was told.
Sarao’s electronic trading would not be considered illegal this side of the Atlantic, and even if it was potentially criminal he should stand trial in the UK and not the US, Westminster magistrates’ court heard.
Sarao, who has Asperger’s syndrome, sat in the dock with his head bowed for most of the opening of his full extradition hearing.
He was arrested last April, five years after the crash in which the Dow Jones plummeted more then 1,000 points in a day and 600 points in a five-minute period.
The US justice department claims Sarao and his company, Nav Sarao Futures Limited, made £26 million illegally over five years.
The former bank worker and Brunel University student faces charges including wire fraud, commodities fraud and market manipulation, which carry sentences totalling a maximum of 380 years.
Sarao traded in futures contracts on the CME, a financial and commodities derivatives exchange based in Chicago.
He is said to have placed sell orders before cancelling and this “manipulation” drove the market down at a vast profit. He is accused of using “spoof trades” and “flashing” large orders to affect market prices.
He allegedly modified more than 20 million orders.
But in a document submitted to the court, James Lewis QC said: “The E-minis is a fast moving market. Traders execute and cancel trades in milliseconds.”
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He added: “The approach of the American authorities falls into error in asserting that, once a bid or order has been placed, it must remain at the same level. That is incorrect and patently misleading.”
He continued: “The initial submission is that the conduct alleged is not criminal in this country.
“If the defendant fails in that submission the interests of justice are such that any trial should be in this country. In any event he should be discharged.”
The hearing, before District Judge Quentin Purdy, is expected to last two days.
The case continues.
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