The British financial trader dubbed the Hound of Hounslow has admitted helping trigger a multi-billion-dollar Wall Street crash from a suburban UK home.



Navinder Singh Sarao pleaded guilty on Wednesday to wire fraud and spoofing after being extradited to the United States to face federal charges related to his role in the 2010 Wall Street flash crash.

Sarao, 37, who traded on the Chicago Mercantile Exchange (CME) from his parents’ home near London’s Heathrow Airport, appeared in leg shackles in a Chicago court room on Wednesday. The case judge told him he faces up to 30 years in prison after the charges under a plea bargain.

Sarao was sent to the US in October after losing a High Court challenge against a decision to extradite him over the “flash crash”, which saw the Dow Jones Industrial Average plunge 600 points in five minutes, wiping tens of billions of pounds off the value of US shares.

Sarao agreed to pay the US government $12.8m (£10.3m), the amount prosecutors said he earned from illegal trading. He will be released on a $750,000 bond and will be allowed to return to the UK pending sentencing in the United States, US judge Virginia Kendall said.



Sarao used an automated trading program to spoof markets by generating large sell orders that pushed down prices, and then cancelled the trades and bought contracts at lower prices.

The case centres on his alleged contribution to the Dow Jones Industrial Average plunging 600 points in five minutes on 6 May 2010, wiping almost $1tn off the value of US shares. US authorities claim he made $875,000 on the day. The 36-minute-long crash saw the Dow Jones industrial average plummet 998.5 points – its biggest ever slump during a single trading session.

The US Department of Justice alleges that Sarao earned $40m (£26m) by using software to place fake trades to move prices up or down. He faced 22 charges, which carry sentences totalling a maximum of 380 years.

At an extradition hearing at Westminster Magistrates’ Court in March, District Judge Quentin Purdy ruled that Sarao could be sent to stand trial in the US.

However lawyers for the former bank worker and Brunel University student argued that his actions did not constitute a crime in the UK, where he should be tried because he is a British citizen.

Two judges at the High Court in London in October refused to give him permission to challenge the extradition order and he was later sent across the Atlantic.

Sarao has been called the Hound of Hounslow, in reference to the film Wolf of Wall Street about powerful and unscrupulous traders.

US prosecutors in Chicago have stepped up their investigations into spoofing in recent years. In July, Michael Coscia became the first person to be convicted of spoofing after it was made a crime under the Dodd-Frank Act. He was sentenced to three years in prison.

