Home / People / #False: ‘US created laws to trap “Hound of Hounslow” Nav Singh Sarao’ – Lawyer.

#False: ‘US created laws to trap “Hound of Hounslow” Nav Singh Sarao’ – Lawyer.

The US request to extradite the London-based trader Navinder Sarao, who is accused of helping to spark a $1 trillion Wall Street crash in 2010, was “false and misleading” because it misrepresented the way markets work, his lawyer has told a court.

Sarao is wanted by US authorities after being charged on 22 criminal counts including wire fraud, commodities fraud, commodity-price manipulation and attempted price manipulation.

The 36-year-old, who lives and worked at his parents’ home in Hounslow is accused of using an automated trading program to “spoof” markets by generating large sell orders that pushed down prices.

He then cancelled those trades and bought contracts at lower prices, prosecutors say.

The flash crash saw the Dow Jones industrial average briefly plunge more than 1,000 points, temporarily wiping out nearly $1tn (£650bn) in market value.

Sarao’s team are looking to block extradition on the grounds that the US charges would not be offences under English law, and if they are, that he should be tried in Britain.

At a court hearing in London on Thursday to consider whether a US trading expert could give evidence when the case is decided next year, Sarao’s lawyer James Lewis said his testimony was needed to debunk the US extradition request because it demonstrated that there was nothing unusual in traders cancelling orders.

“Americans had to create the crime of spoofing,” Lewis told Westminster magistrates court in London, citing a report by Prof Lawrence Harris from the Marshall School of Business at the University of Southern California.

“The [US extradition] request is false and misleading,” he added. “It’s simply not the reality of what happens in any market. It’s arrant nonsense.”

Mark Summers, representing the US authorities, said they were not suggesting cancelling trades was in itself wrong, but that Sarao had never planned to execute the orders he had posted.

“His intention was to manipulate the market process by creating a false impression of liquidity.  It was bogus from the outset,” Summers said, adding that the US disputed the report by Harris, a former chief economist at the US Securities and Exchange Commission.

Harris had also given a differing view on the issue on other occasions, Summers told the court.

District judge Quentin Purdy indicated that he would allow some of Harris’s report to be considered at the full extradition hearing next February, but agreed to a further hearing on 18 December to allow a detailed US response to be taken into account.



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