Navinder Singh Sarao, the London trader arrested last month in connection with the 2010 Flash Crash, really doesn’t like high-frequency traders.
That could be why the 36-year-old, who reportedly used to trade from his parent’s house, made more than 100 complaints to the Chicago Mercantile Exchange about other traders, ratting them out for what he thought was market manipulation.
The Wall Street Journal reports that he filed the complaints as frequently as every few weeks, with detailed information on when the supposed violations were made.
The type of fraud that Sarao is accused of committing involves placing large bets to create a market reaction and then cancelling those trades and replacing them with bets in the other direction.
Known as “spoofing,” that kind of fraud would have a much larger impact if done by high-frequency traders, which use sophisticated technology to make moves within fractions of a second.
Still, pointing fingers at other traders who do the same thing as him, only worse, may not have been a wise move for Sarao.
He’s now stuck in a UK prison, fighting extradiction to the US with a publicly-funded lawyer, assets frozen and unable to make his $US7.8 million bail.
C’mon, Nav, nobody likes a rat.