A British Indian trader who is accused of causing the a trillion-dollar stock markets crash in the US in 2010 has been freed on bail after the conditions of his bail were changed by a court in London.
Navinder Singh Sarao, 36, is sought by the US Department of Justice for perpetrating the so-called US ‘Flash Crash’ in May 2010 from a bedroom at his parent’s home in Hounslow, West London.
Mr Sarao has been held at Wandsworth prison since his arrest in April and had his bail reduced to £50,000 from £5 million after he revealed that he could not access his money because of a freeze on his financial assets placed by US authorities.
He still faces extradition to the United States on charges carrying a maximum sentence of 380 years.
A full extradition hearing is due to take place in September.
Mr Sarao’s lawyers revealed to the court on Friday that he had funds of more than £30 million, with more than £25 million of those funds held in Swiss bank accounts.
Mr Sarao is believed to have now set up an escrow account with the US Commodity Futures Trading Commission, into which all of his assets will be diverted with the exception of £2.5 million which have been set aside for his legal expenses.
Despite his wealth, Mr Sarao lived at his parent’s three-bedroom semi in Hounslow and drove his retiree father’s battered old Vauxhall.
According to US authorities, Mr Sarao used fake “sell orders” which he had no intention of honouring to drive down prices, before swooping on the cheap commodity futures and then profiting when the market returned back to normal.
They believe his actions resulted in the Flash Crash, when the Dow Jones index lost more than £500 billion in a matter of minutes before recovering later.
It’s thought that Mr Sarao – one of three brothers – made up to half a million pounds a day and was described as a “legend” by other day-traders.
His lifestyle however, didn’t reflect the millions he was accumulating.
Nav Singh Sarao outside court today.
His 61-year-old mother had to work two jobs to make ends meet while he delayed his lunch so he could buy discounted sandwiches and also took late trains in order to avoid peak-time fares.
At the time of his arrest, Mr Sarao was dubbed the “Hound of Hounslow” in a rather ironic reference to the real Wolf of Wall Street, immortalized by Leonardo di Caprio last year.
US investigators believe Mr Sarao channelled his money into companies he set up in the Caribbean islands of Nevis and Anguilla, but have not suggested he spent any of it on property, cars or luxuries.
The Brunel University graduate initially worked at a bank before joining a training programme at a day trading firm in Surrey where he treated trading online “like a video game” and was exceptionally good at “beating the system”.
Mr Sarao has denied any wrong doing, saying he is “merely good at his job”. His family say he has been set up.