The more I read into the curious case of
Navinder Sarao, the more baffled I am as to the intensity of
both the authority’s response and the press
Sarao’s case has attracted
worldwide media attention as the "man charged with causing the
This has been followed by numerous
articles claiming how it is impossible that one man caused the
Of course it is.
But, in fact, the flash crash is not at
the heart of the charges and the coverage stems from a small
section of the charge document entitled (but not in fact
explaining) Sarao’s Manipulative Activity
Contributed to the Flash Crash.
Sarao is being charged with market
manipulation stemming from a strategy that was heavily reliant
Now layering is of course an illegitimate
trading strategy but the response from (and indeed even the
involvement of) the FBI is baffling.
Why is a prop trader from Hounslow facing
years in prison for spoofing?
There have been a number of charges in
recent years for layering. The first came in 2010 when Finra
charged traders at Trillium Trading and last year the
co-founder and others at Visionary Trading were charged by the
Both charges were settled by a fine
(substantially lower than Sarao’s £5m bail
in both instances), neither involved the FBI and no one was
even threatened with prison or criminal prosecution.
It just doesn’t make