The British financial trader accused of helping to trigger the 2010 Wall Street 'Flash Crash' lost a legal bid for bail after a High Court judge ruled he posed "a clear flight risk".
Navinder Singh Sarao, 36, was seeking release from Wandsworth prison as he fights extradition to America.
The extradition battle is expected to take many months.
Mr Sarao was arrested on 21 April at the request of the US authorities, who want him extradited to face allegations that he helped cause the multibillion-dollar US stock market crash from his parents’ home 3,500 miles away in Hounslow, west London.
The US Justice Department claims Mr Sarao and his company, Nav Sarao Futures Limited, made £26m illegally by manipulating the market over a five-year period. He faces 22 charges including wire fraud, commodities fraud and market manipulation and faces long jail sentences if convicted.
Lawyers for the trader, who operated from his parents’ home in Hounslow, west London, said a bail condition imposed at Westminster Magistrates’ Court that he personally pay a £5m security was impossible to comply with – and therefore unlawful – because US authorities had obtained a worldwide freezing order on his assets.
James Lewis QC, for Mr Sarao, said the trader’s parents had offered £50,000 as a surety and were also offering to put up the value of their house as bail. He said it was ‘manifestly unjust and unlawful” Mr Sarao had been denied bail by conditions that were “unnecessary and impossible to fulfil”. He said Russian oligarchs facing extradition had not faced such conditions.
Mr Sarao, British-born, schooled in Hounslow and who went to university in London, was from “a very tight-knit and close family”. He had lived in family home with his parents all his life, had no car and there was no prospect of him risking their life savings by absconding.
But Mark Summers QC, for the US government, opposing bail and said the parents’ bail money and the value of their house was a “derisory” amount and “small change” compared with “the $40m dollars of criminal profit” Mr Sarao allegedly had at his disposal.
He claimed Mr Sarao had no real ties to the UK, was single and had no children and had previously lied to regulators about how he traded. The trader needed to reveal all his worldwide funds in order to provide reassurance he wouldn’t flee.
Mr Justice Cranston refused to vary bail conditions. “There is a clear flight risk” without the £5m security, he said.
The £50,000 – compared with the alleged £40m profits Mr Sarao had made – was “no assurance at all”.
The jailed trader’s solicitor, Richard Egan, said the Sarao family were “obviously disappointed”, but added: “The door has been left slightly ajar for us to come back again.”Reuse content