Accused U.S. 'flash crash' trader set to be freed on bail in London

[August 14, 2015]  LONDON (Reuters) - Navinder Sarao, the London-based trader accused by the United States of market manipulation that contributed to the 2010 Wall Street "flash crash", is set to be freed on bail on Friday after his conditions were modified, one of his lawyers said.

Sarao was arrested by British police on a U.S. extradition warrant in April after being charged with wire fraud, commodities fraud and market manipulation by the U.S. Justice Department.

Lawyer Russell Nicholson said Westminster Magistrates Court had removed a condition to pay 5 million pounds ($7.8 million), without objection from the United States, and following that decision Sarao would be released from custody.

The court had granted Sarao bail on April 22 but he had been unable to meet the terms and had remained in prison. He was brought to court every week for short appearances but the situation remained deadlocked until Friday.
 

As well as the requirement to deposit 5 million pounds in a court account, the original bail conditions included wearing an electronic tag, complying with a night-time curfew at his home in Hounslow, west London, and reporting to a police station three times a week.

The court had also ordered that Sarao should have no access to the Internet for any purpose, that his passport and those of both his parents should be handed over to police, and that his movements should be restricted.

Nicholson said that if Sarao was able to meet all the remaining bail terms he would walk free directly from court, but if there were some terms that he could not immediately meet he would be taken back to prison to sort it out and be freed from there.

Sarao is accused of using an automated program to "spoof" markets by generating large sell orders that pushed down prices. He then canceled those trades and bought the contracts at the lower prices, reaping a roughly $40 million profit on his trading, U.S. authorities said.

Sarao has denied wrongdoing, telling the court in May: "I've not done anything wrong apart from being good at my job."

The flash crash saw the Dow Jones Industrial Average briefly plunge more than 1,000 points on May 6, 2010, temporarily wiping out nearly $1 trillion in market value.

(Reporting by Michael Holden, writing by Estelle Shirbon; editing by Stephen Addison)
 

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