The notorious high frequency trader had wiped out nearly $1 trillion of value of US stocks in 2010. Prosecutors said he “abused sophisticated technology” to generate profits illegally.
British futures trader Navinder Sarao on Wednesday pleaded guilty of criminally spoofing, which triggered a 2010 “flash crash” that wiped nearly $1 trillion (910 million euros) off the value of US stocks.
Sarao used a modified computer program to push down prices by generating large sell orders, and then cancelling them to buying new contracts at lower prices, prosecutors said.
He said he would pay the US government $12.9 million he made in profits from illegal trading, but that it would be difficult to track down all of the funds.
By pleading guilty, Sarao became the second person to be convicted spoofing under 2010 legislation that targets the crime.
He is likely to be banned from trading under a deal with the Commodity Futures Trading Commission that seeks more $38 million in monetary sanctions.
“Sarao abused sophisticated technology to make a quick profit, and jeopardized the integrity of US financial markets,” Assistant US Attorney General Leslie Caldwell said.
“By flooding the marketplace with bogus orders, his scheme victimized countless individuals,” she added.
‘Message to everyone’
Former US prosecutor Renato Mariotti said the conviction sends a “message to everyone in the industry.”
“The government has shown once again that they can bring criminal charges in a spoofing case and obtain a conviction,” added Mariotti.
Sarao is expected to be sentenced next year.
ls/bw (AP, Reuters)