Television crews wait outside the address where Nav Sarao Futures Limited is registered, in Hounslow, west London April 22, 2015.
IN PHOTO: Television crews wait outside the address where Nav Sarao Futures Limited is registered, in Hounslow, west London April 22, 2015. The small suburban house in the flight path of London's Heathrow airport gave no clue to neighbours that it was headquarters of a man accused of earning millions through fraud, and helping cause a trillion dollar "flash crash" on U.S. stock markets. REUTERS/Eddie Keogh

UK trader Navinder Singh Sarao, hailing from West London’s Hounslow district, was arrested by U.S. authorities for his alleged part in the 2010 flash crash of Wall Street. The crash stimulated the wiping off billions of U.S. dollars off shares’ value in just minutes. The financial trader apparently made use of trading software to place US$200 million [$258 million] of false trades from his house.

Havoc was created in Wall Street due to Sarao’s doings as the Dow Jones industrial average plunged a cool 600 points in just about five minutes. He had changed his orders over 19,000 times and then went on to cancel them. He minted money by manipulating the market movement by making it believe that there were a lot more sellers than there actually being so.

The trader is accused of duping the market into believing there were a lot more sellers than there really were and profiting from the market movement. Sarao is said to have changed his orders more than 19,000 times before cancelling them.

"Sarao's alleged manipulation earned him significant profits and contributed to a major drop in the U.S. stock market on May 6, 2010. By allegedly placing multiple, simultaneous, large-volume sell orders at different price points — a technique known as 'layering' — Sarao created the appearance of substantial supply in the market," the Justice Department said in a statement.

Charges against his company Nav Sarao Futures Limited were made public by the U.S. Commodity Futures Trading Commission or the CFTC. It accuses him of manipulating the market via automated computer programs for the past five years and as recently as the beginning of the current month.

It also says that he minted a whopping US$40 million."Protecting the integrity and stability of the U.S. futures markets is critical to ensuring a properly functioning financial system. Today's actions make clear that the CFTC, working with its partners on the criminal side, will find and prosecute manipulators of U.S. futures markets wherever they may be," CFTC director of enforcement Aitan Goelman said. Sarao, whose hearing at the Westminster Magistrates' Court is slated for Wednesday, had been charged in a federal criminal complaint in the northern district of Illinois with one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation and one count of spoofing.

To contact writer, email at ritambanati@yahoo.com

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