British Trader Charged in ‘Flash Crash’ Fails to Post Bail

http://www.nytimes.com/2015/04/30/business/dealbook/navinder-singh-sarao-flash-crash-bail.html

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LONDON — Navinder Singh Sarao, the 36-year-old British futures trader charged with contributing to a sudden plunge in American stock markets, has not met the conditions of his bail, his lawyer said Wednesday in a London court. He has remained in custody since his arrest on April 21.

Mr. Sarao, who traded from his parents’ house in west London and appeared in court Wednesday in a gray tracksuit, was granted another week to meet his bail conditions, which include supplying 5.05 million pounds, or about $7.7 million. His parents were required to contribute £30,000 toward the total, and his two brothers were required to provide £10,000 each.

Richard Egan, one of his lawyers, declined to comment on why Mr. Sarao had not posted bail or whether he would be able to post it this week. If he cannot, he will come back to court in a week.

Mr. Sarao is accused of helping to cause the so-called flash crash in May 2010, when American stock markets plummeted more than 1,000 points in a matter of minutes, only to recover their losses quickly. The events rattled the markets and confounded regulators, who charged Mr. Sarao five years later with the help of an informant.

Mr. Sarao faces 22 criminal charges, including wire fraud and commodities manipulation, filed by the United States government. If convicted on all charges, he could face a jail sentence of 320 years. He is fighting extradition and has a hearing on that matter scheduled for Sept. 24.

During a hearing last week, Joel Smith, another one of his lawyers, said his client had “substantial means available to him,” including £5 million in a trading account, of which more than £4.7 million was a loan. He also cited a betting account containing £100,000.

Mr. Sarao’s arrest has prompted heated discussions about potential manipulation of the markets.

Mr. Sarao lives with his parents in Hounslow, a middle-class neighborhood near Heathrow Airport. He graduated from Brunel University in London and worked at Futex, a British trading firm, for six years.

“Nav was always going to the kind of person that I believed would be legendary, potentially legendary in some way in the future,” Paolo Rossi, chairman of Futex, said in an interview with Bloomberg.