Flash crash trader to appeal after judge approves US extradition

A London court has approved the extradition of bedroom trader Navinder Sarao to face trial in the US where he is accused of playing a part in causing the May 2010 'flash crash' that wiped billions from Wall Street stocks in seconds.

Sarao, who traded on the Chicago Mercantile Exchange (CME) from his parents' semi-detached house near London's Heathrow Airport, has denied the 22 charges and intends to appeal the decision.

The charges include "spoofing", where traders issue buy or sell orders with the intent to cancel the transaction before execution to enable them to make money from luring computerised transactions by high-frequency traders, which is outlawed in the US but not in the UK.

As well as charges of spoofing itself, the US Federal Bureau of Investigation (FBI) has also accused Sarao of contributing to the 2010 'flash crash' through some of the large spoof trades he placed at the time, which led to a deluge of much larger automated trades.

Sarao's lawyers, who have pointed out that US-UK agreements only allow accused persons to extradited if their alleged crimes fall under English law, told reporters they were "very disappointed" by the ruling by judge Quentin Purdy at Westminster Magistrates' Court.

"We think we have still got a strong argument and we will be appealing this decision," they added.

The ruling will need to be approved by Home Secretary Theresa May before the extradition would be carried out.