The UK trader accused of contributing to the Wall Street “flash crash” has been returned to custody after a Westminster Magistrates Court appearance today in which he was granted another week to raise £5.05 million bail.
Navinder Singh Sarao has been charged by the US Department of Justice with wire fraud, commodities fraud and market manipulation.
It is alleged that he used a high speed internet connection at his parent’s home in Hounslow, West London, to place a large number of fraudulent electronic orders to sell one type of financial contract. He is then accused of cancelling the orders, forcing the prices back up again and taking profit from the price swing.
The Department of Justice believes that these trades contributed to the flash crash of May 6, 2010, when the Dow Jones stock exchange lost 700 points in a matter of minutes, wiping $800 billion of the value of US shares, before recovering again.
At a hearing last Wednesday, Sarao was granted bail provided he produce just over £5 million in bail and his parents put up £50,000. He is not allowed to move from his parents’ house in Houndslow. He also cannot travel internationally or use the internet.
Sarao appeared in a grey sweater and tracksuit trousers. He had already failed to make bail a week earlier and will appear in court again on May 6.
Additional reporting by Reuters