- After facing the threat of over three centuries in prison, Navinder Singh Sarao was sentenced Tuesday to time served plus a year of house arrest for his role in the 2010 flash crash.
- The May crash wiped out nearly $US1 trillion from the stock market before it rebounded.
- Federal authorities suggested the lenient sentence for Sarao previously this month.
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The British trader who initially faced up to 380 years of prison time for his role in the 2010 equity “flash crash” ended his ordeal in court with a decidedly lighter sentence: no more jail time. A federal judge sentenced Navinder Singh Sarao, the so-called “Hound of Hounslow,” to a year of house arrest Tuesday. Sarao, who initially faced 22 charges, pleaded guilty to two – a count of wire fraud and a count of spoofing, a type of market manipulation that involves placing orders one never intends to follow through on. Prosecutors say that Sarao, who traded from his bedroom at his parents’ house in Hounslow, London, made about $US12.8 million through trades that contributed to the May 2010 flash crash. That crash wiped out nearly $US1 trillion from the market before it rebounded. Sarao is thought to have racked up $US40 million from trading overall, though he later lost much of that money to fraud schemes himself, BBC reported.
Though federal sentencing guidelines suggest at least six and a half years in prison, the Department of Justice recommended earlier in January that Sarao be sentenced to time served. In a January filing the government said the court should weigh Sarao’s autism diagnosis and cooperation with officials in sentencing. Judge Virginia Kendall of the Northern District of Illinois, a U.S. district court, sentenced Sarao. The house arrest adds on to time already served to make up the full sentence. Sarao spent four months in a UK prison in 2015, before he was released on bail, his law firm said in a statement.“Nav has been living under the threat of a very long sentence for almost five years,” said Roger Burlingame, Sarao’s attorney, adding that Sarao “is overjoyed to put this behind him, go home, and move on with his life.”
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