U.K. Man Arrested on Charges Tied to May 2010 ‘Flash Crash’
Dow Jones Industrial Average dropped 600 points within minutes in 2010
A U.K. man was arrested on Tuesday on U.S. charges that he contributed to the May 2010 “Flash Crash” in which the Dow Jones Industrial Average plunged 600 points, the Justice Department said.
Navinder Sarao is in the custody of U.K. authorities and faces charges of fraud, manipulation and a high speed trading practice known as “spoofing,” the agency said.
Mr. Sarao also faces charges from the U.S. Commodity Futures Trading Commission, which claims he played an integral in contributing to the Flash Crash.
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The CFTC said the spoofing techniques involved placing and quickly cancelling large orders “with no intention of the orders resulting in transactions.”
Navinder Sarao operated from his residence in the U.K. and traded through his own company, Nav Sarao Futures Ltd.
The CFTC, in its complaint, said Mr. Sarao over a period of five years “engaged in a massive effort to manipulate” the price of a stock market index futures contract—E-mini S&P—“by utilizing a variety of exceptionally large, aggressive and persistent spoofing tactics.”
The CFTC said the conduct continued until as recently as April 6, 2015.