Sun Sentinel Palm Beach Edition
Autistic trader behind 2010 ‘flash crash’ spared prison
CHICAGO — A U.S. judge has sentenced a socially awkward math whiz-turned-futures trader who earned tens of millions of dollars over several years and helped trigger a U.S. stock market “flash crash” from his parents’ suburban London home to time served and a year’s home confinement, sparing him imprisonment after prosecutors praised his cooperation and said his crimes were unmotivated by greed.
Government prosecutors and defense lawyers described Navinder Singh Sarao, 41, as autistic in memos filed before sentencing this week in Chicago federal court. They highlighted Sarao’s savantlike ability to spot numerical patterns in split seconds, saying he regarded trading as a video game in which the object was to compile points not money.
The sudden tanking of shares on May 6, 2010, earned Sarao nearly $1 million and temporarily wiped billions of dollars off the value of publicly traded companies, denting investor confidence and leaving many wondering if the market was rigged.
Despite earning some $70 million as a trader over several years, Sarao often ate at McDonald’s using discount coupons. His priciest purchase as a multimillionaire was a second-hand Volkswagen that cost under $10,000. His modest lifestyle has altered little from his days as an active trader, living today on $336 in British government benefits.
Before U.S. District Judge Virginia Kendall imposed a sentence, Sarao apologized to those he harmed with his market manipulation, and he expressed remorse for the trauma his prosecution put his family through.
“I will never do anything illegally again,” he said.
Defense attorney Roger Burlingame described his client as a “singularly sunny, childlike, guileless, trusting person who is instantly beloved by all who encounter him, including the FBI agents and prosecutors.”
Home confinement may not be much of a departure from Sarao’s typical life. He has lived in the same small room with his parents in Hounslow, United Kingdom,
since childhood, rarely venturing out, in part due to his inability to complete the simplest everyday tasks, including doing laundry, Burlingame said.
Sarao spent four months in a British prison — the time Judge Kendall referred to as served — after a grand jury indicted him in Chicago in 2015. A U.S. judge later granted him bond, secured by his parents’ home, which allowed Sarao to return to Britain as criminal proceedings in the United States played out.
After his extradition to Illinois in 2016, Sarao promptly agreed to plead guilty to wire fraud and spoofing, which refers to bidding with the intent of quickly canceling the bid to manipulate prices. And within weeks, he returned all his illegal profits — more than $12 million.
The 2015 indictment said Sarao manipulated EMini S&P, which helped spark the 2010 “flash crash” when the Dow Jones Industrial Average plunged 600 points in five minutes before rebounding.
Sarao allegedly earned around $900,000 that day, according to court documents.