Navinder Singh Sarao, the UK-based futures trader charged in connection with the 2010 “Flash Crash,” bragged that he called the Chicago Mercantile Exchange and told them to kiss his “a–,” according the criminal complaint.
This allegedly occurred in an email after the CME had contacted him on May 6, 2010, the day of the “Flash Crash.”
From the Department of Justice complaint (via Matt Levine):
As reflected in correspondence with both Sarao and [a futures commission merchant] he used, the CME observed that, between September 2008 and October 2009, Sarao had engaged in pre-opening activity-specifically, entering orders and then cancelling them-that “appeared to have a significant impact on the Indicative Opening Price.” The CME contacted Sarao about this activity in March 2009 and notified him, via correspondence dated May 6, 2010, that “all orders entered on Globex during the pre-opening are expected to be entered in good faith for the purpose of executing bona fide transactions.” The CME provided a copy of the latter correspondence to Sarao’s FCM, which suggested to Sarao in an email that he call the FCM’s compliance department if he had any questions. In a responsive email dated May 25, 2010, Sarao wrote to his FCM that he had “just called” the CME “and told em to kiss my arse.”
Sarao, 36 was arrested in London in connection with the charges in the US. He’s been charged on one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation, and one count of “spoofing” — buying or selling large orders with the intent to cancel. The US is seeking extradition.
According to the complaint, Sarao allegedly used an algorithm to manipulate the market for E-Mini S&P 500 futures contracts (E-Minis) on the CME.
“Sarao’s alleged manipulation earned him significant profits and contributed to a major drop in the U.S. stock market on May 6, 2010, that came to be known as the ‘Flash Crash.’ On that date, the Dow Jones Industrial Average fell by approximately 600 points in a five-minute span, following a drop in the price of E-Minis,” the DOJ said in a release.
Sarao was the sole employee of UK-based Nav Sarao Futures Limited. It appears that he traded from a home in a London suburb called Heston.
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