British day-trader accused of causing the 2010 US Flash Crash must put up £5.05m in bail money as he fights extradition to the United States over fraud charges.
Navinder Singh Sarao, 36, who ran a small futures trading company called Nav Sarao Futures from a house in Hounslow, is charged with several counts of fraud by the US Commodity Futures Trading Commission.
The family will contribute £50,000. He must put up £5m.
“It’s a significant sum but this case requires significant sums,” Judge Quentin Purdy said at Westminster Magistrates Court this afternoon.
In order to secure bail the solicitor for the defendant, Joel Smith, suggested the judge accept the offer of collateral from the family as well as the surrender of their passports.
Smith described Sarao as a man of “impeccable character” who had no previous convictions or record beyond a few speeding tickets.
“This has come as a bolt from the blue for Mr Sarao” Smith said.
Residents in the quiet suburban street where Nav Sarao Futures was registered were also perplexed.
“You got £26m?” one neighbour said last night. “You think you’d be living on this street?”
On Tuesday an affidavit was unsealed which alleged Sarao made $40m by trading US equity futures contracts, known as E-Minis, by manipulating prices on the index.
In court Smith referred to Sarao’s closeness to his family and the fact he lived with his parents and a brother, while a second brother lived close by.
“It can only be said he has the strongest possible community ties with this country” Smith added.
He said there was “no suggestion of secrecy” in Sarao’s actions, adding the name of the company he traded under highlighted this. He also fought back against the argument put forward by the prosecutor, Aaron Watkins, who has sought to deny Sarao bail on the basis he was likely to abscond due to the lengthy sentence – up to 380 years – he potentially faces.
Smith argued there was no precedent in European law stating fear of sentence could be the sole reason for denial of bail.
The judge agreed conditional bail, saying in addition to the money, Sarao, who studied at Brunel University and previously worked in a bank, must also surrender his passport, wear a tracking device and is banned from accessing the internet.
He will also be required to attend Hounslow police station every Monday, Wednesday and Saturday. His parents may also volunteer to surrender their passports as part of the bail conditions.
A judicial review case will take place on 26 May followed by an extradition hearing on 18 August.
Sarao, dressed in a yellow sweater and tracksuit bottoms, sat in court with his arms folded and remained subdued. He was told to speak up by Purdy on several occasions when speaking in court.