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.