The trader thought to be responsible for 2010’s ‘flash crash’ has pleaded guilty at a Chicago court.
Navinder Sarao, from Hounslow in the UK, traded futures from his parents’ home in London on the Chicago Mercantile Exchange.
He admitted to engaging in spoofing to manipulate the market over a lengthy period, which prosecutors say contributed to wiping almost $1 trillion off the value of US shares on 6 May 2010.
Sarao plead guilty to one count of spoofing and one of wire fraud after losing his legal challenge to prevent his extradition to the US last month. He has agreed to pay the US government $12.7 million, the amount he made from his illegal trading activity.
The guilty plea means he now faces up to 30 years in prison, however prior to the plea bargain he was facing 22 charges carrying a total sentence of 380 years.
The ‘flash crash’ has since become the subject of intense industry debate about the role of high-frequency trading and has seen regulators force exchanges to introduce better controls to prevent sudden market swings.