A London-based day-trader accused by the United States of a market manipulation that contributed to a Wall Street “flash crash” in 2010, was freed on bail on Friday after spending four months in prison.
Navinder Sarao, who lived in a small, nondescript house near Heathrow Airport, was arrested by British police on a U.S. extradition warrant in April after being charged with wire fraud, commodities fraud and market manipulation by the U.S. Justice Department.
The crash saw the Dow Jones Industrial Average briefly plunge more than 1,000 points on May 6, 2010, temporarily wiping out nearly $1 trillion in market value.
Wearing a dark jacket with a hood pulled over his head, the 36-year-old left Westminster Magistrates’ Court with his lawyer, looking stony-faced and without speaking to reporters after the judge agreed to modify his bail terms.
Sarao is accused of using an automated programme to “spoof” markets by generating large sell orders that pushed down prices. He then cancelled those trades and bought the contracts at the lower prices, reaping a roughly £25 million profit on his trading, U.S. authorities said.
He has denied wrongdoing, telling the court in May: “I’ve not done anything wrong apart from being good at my job.”
Sarao had been granted bail on April 22 but, with his assets frozen by the U.S. authorities, he had been unable to meet the terms of £5 million pounds, meaning he remained in prison for four months.
On Friday the court heard, however, that Sarao had funds of more than £30 million, including £25.5m held in Switzerland and £5m in an escrow account in the United States.
The disclosure was enough for the U.S. authorities not to oppose the renewed bail application and as a result the judge agreed to lower the terms to £50,000 which has been paid.
As part of his new bail conditions, Sarao will have to abide by a nightly curfew, hand in his passport, be electronically monitored and agree not to move outside London’s orbital motorway. He cannot use the Internet for trading.
The court also heard that the trader, who is set to face an extradition hearing in September, had been diagnosed with Asperger’s syndrome.