‘Spoofing’ not a crime in England, lawyer claims in extradition fight
THE American crime of “spoofing the market” has no English equivalent and Navinder Sarao’s trading had only a “gossamer-thin” link to the Flash Crash on Wall Street in 2010, a court was told yesterday.
Mr Sarao is resisting an attempt to extradite him to the United States on 22 charges linked to market manipulation after he placed and rapidly cancelled large volumes of buy-and-sell orders on the Chicago Mercantile Exchange from his bedroom in Hounslow, west London.
Lawyers for the 37-yearold have argued that these computer-driven trading tactics were not criminal under English law and so can- not be used to extradite him for an American trial.
“There is no English crime of spoofing. No one has ever been convicted of this crime in England,” said James Lewis QC on the second and final day of the Westminster magistrates court hearing. “The key question for his court is whether the conduct of Mr Sarao amounts to a crime if it occurred in the UK.”
The first person to be con- victed of spoofing was found guilty in Chicago in November, after the crime was created through Dodd-Frank financial reforms in 2010.
Mr Lewis also argued that Mr Sarao’s trading patterns could not, in any case, be classed as fraud, because traders in rapidly-moving S&P futures often scrapped their orders and made no claims to the rest of the market that their offers would stand indefinitely.
Mark Summers QC, representing the US authorities, said this position was “extreme” and that Mr Sarao’s orders to the market came with an implied term that he intended to trade.
The London court will rule on March 23 whether he can be extradited.