May 27, 2020

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May 26, 2020

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US Attorney, CFTC, and Navinder Sarao

We have previously provided updates on the Navinder Singh Sarao case, pending in the U.S. District Court for the Northern District of Illinois.  After being charged in February 2015 with fraud and spoofing related to the 2010 Flash Crash, Sarao, then resident in the United Kingdom, fought a yearlong, multiple-appeal battle against extradition, before he was extradited to the United States.  On Nov. 9, 2016, Sarao appeared in Ilinois District Court to plead guilty to one count of spoofing and one count of wire fraud.

In the plea agreement, Sarao admitted to participating in a scheme to defraud participants in the E-mini S&P 500 market using the CME Globex electronic trading platform.  He did so by placing large orders on one side of the market to give the false impression of interest, to the benefit of his smaller orders resting on the other side of the market.  This conduct – “spoofing” – enabled Sarao to profit by taking advantage of the price swing resulting from his “spoofed” orders, and the subsequent return of the price to its previous levels.

In connection with that plea, Sarao consented to a forfeiture of assets amounting to nearly $13 million. The sentencing guidelines for the crimes to which he pleaded guilty also carry with them a maximum sentence of thirty years’ imprisonment.

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About this Author

Douglas Grom, Greenberg Traurig Law Firm, Chicago, Finance and Litigation Attorney
Practice Group Attorney

Douglas M. Grom focuses his practice on transactional, regulatory and litigation matters in the commodities, derivatives and securities industries. He counsels futures commission merchants, commodity trading advisors, commodity pool operators, introducing brokers, proprietary trading firms and investment advisers regarding regulatory and compliance matters. Douglas is regularly involved in litigation in state and federal courts and in industry arbitration and mediation before the NFA and FINRA. He also represents clients in general corporate matters, including business...

Gregory Lawrence, Greenberg Traurig Law Firm, Energy, Crorporate and Finance Litigation Law Attorney

Gregory K. Lawrence focuses his practice on the electricity and natural gas industries. He is experienced appearing before the Federal Energy Regulatory Commission (FERC) and multiple state utility commissions regarding regulatory proceedings, compliance and enforcement, capacity and energy market structure, transactions and negotiations, asset transfers, and governmental affairs. Greg’s clients include financial institutions and funds, marketers, traders, renewable and other project developers, municipal and investor-owned utilities, and large energy consumers.

Recognized as a leading energy and electricity lawyer by Chambers USA, Greg is a frequent speaker at energy industry conferences and a contributor to a wide range of publications, includingThe Electricity Journal, Electric Light & PowerEnergy RiskBloomberg Law ReportsProject Finance InternationalCorporate CounselWindpower Engineering, and EnergyLaw 360. He also authored a quarterly column in Electric Energy T&D Magazine and "Rationalizing Supply with Demand: Electricity Demand Response in U.S. Wholesale Electricity Markets," a book chapter inU.S. Law and Taxation.

In addition, Greg has taught energy seminars at the Massachusetts Institute of Technology Sloan School, Cornell Law School, and Syracuse University. Greg regularly presents at The Harvard Kennedy School, Harvard Electricity Policy Group, regarding electricity market structure as well as manipulation legal issues.