An Indian-origin futures trader, arrested here after American authorities accused him of contributing to the 2010 Wall Street "flash crash" which wiped nearly USD 1 trillion off the value of US shares in minutes, today opposed his extradition to the US.
Navinder Singh Sarao, 36, who was arrested by British authorities yesterday at the request of the US Department of Justice, appeared before Westminster Magistrates' Court which granted him a bail.
The bail for Sarao has been set at 5.1 million pounds and a date for his full extradition hearing is yet to be announced.
The Department of Justice wants to extradite Sarao on charges of wire fraud, commodities fraud and market manipulation. Sarao told the court that he opposed his extradition to the US.
"This has come as a bolt from the blue for Mr Sarao," his lawyer Joel Smith told the magistrates' court.
Separately, US regulators filed civil claims against Sarao, adding that he made USD 40 million over five years.
It is claimed the trader, from Hounslow in west London used automated computer programmes to manipulate share prices.
Earlier, Scotland Yard confirmed Sarao was arrested by the Metropolitan police's extradition unit.
Wire fraud is punishable by a maximum 20 year sentence in the US, while commodities manipulation and spoofing is subject to a possible punishment of a USD 1 million fine or a sentence of up to 10 years.
The infamous flash crash saw US markets plunge rapidly, only to then rebound just as quickly. Regulators blamed high-frequency traders placing multiple sell orders.
High-speed trading is where share dealers create computer algorithms to buy and sell stocks in milliseconds.
The Justice Department in a statement said, "Sarao's alleged manipulation earned him significant profits and contributed to a major drop in the US stock market on May 6, 2010".
The sudden slump in share prices wiped about 9 per cent off the Dow worth around USD 1 trillion in value.
"By allegedly placing multiple, simultaneous, large-volume sell orders at different price points - a technique known as 'layering' - Sarao created the appearance of substantial supply in the market," the statement said.
Sarao was then able to buy and sell futures contracts tied to the value of the share indexes, it is alleged.
The US Commodity Futures Trading Commission (CFTC) released details of civil charges against Sarao and his company Nav Sarao Futures Limited.
The statement alleges market manipulation over five years, and as recently as April 6.
