DoJ Recommends no Jail Time for Trader Accused in 2010 Flash-Crash

US prosecutors have asked a Chicago court for no additional prison time for the British futures trader blamed for the 2010 stock market drop, known as the “Flash Crash Flash Crash The Flash Crash was a major stock market crash that happened on May 6, 2010 in which three major US indices crashed in the span of 36 minutes.In particular, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite fell nearly 9% before rebounding within minutes. The event differed from other crashes in that most losses were recovered.The crash was believed to be caused in part by Navinder Singh Sarao, a British financial trader. Sarao was later charged with spoofing algorithms, utilized j The Flash Crash was a major stock market crash that happened on May 6, 2010 in which three major US indices crashed in the span of 36 minutes.In particular, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite fell nearly 9% before rebounding within minutes. The event differed from other crashes in that most losses were recovered.The crash was believed to be caused in part by Navinder Singh Sarao, a British financial trader. Sarao was later charged with spoofing algorithms, utilized j Read this Term,” citing his substantial assistance in building cases against other spoofers.

In a court filing released Tuesday, the government said it would be appropriate for the judge to impose a sentence for Navinder Singh Sarao that does not include prison time. Federal sentencing guidelines initially called for the UK trader to be sentenced to between 78 and 97 months. The final decision on Sarao’s sentencing will be announced on January 28.

Prosecutors wrote that Navinder helped on a range of issues related to the spoofing probes, including providing firsthand information about how to detect, investigate, and prosecute electronically-driven market manipulation crimes. He also testified about the context of interactions with his former programmer, Jitesh Thakkar, who was charged with conspiring with Sarao.

“The defendant’s keen insights and explanations regarding both general and specific patterns of deceptive and manipulative trading have illuminated the government’s understanding of similar spoofing,” prosecutor Michael O’Neill wrote.

Risks to his mental health

The memo describing Sarao’s cooperation also states he has been diagnosed with autism syndrome that makes it difficult for him to make eye contact with people. As such, the DoJ says the prison time would pose serious risks to the 41-year-old’s mental health.

“The defendant clearly was not motivated by money, greed, or any desire for a lavish lifestyle. His only significant purchase was a 5,000 pound car. Of his remaining trading profits, the defendant lost over 40 million pounds to three apparently fraudulent investment schemes,” O’Neill added.

The sentencing memo came roughly three years after Sarao agreed to plead guilty to one count of wire fraud and one count of spoofing. He was extradited to the US in 2016 to face charges over the 2010 “flash crash,” but the government dropped 20 charges against Sarao after he co-operated with the department’s fraud section, including helping the agency gain access to his funds.

Justice Department prosecutors also described Sarao in the filing as a valuable cooperator who educated regulators and enforcement agencies, including the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term and FBI, on the world of HFT fraud and how they place fake trades in a bid to manipulate the market.