Trader who single-handed caused the US stock market to crash in 2010, even if he was slightly incredulous that the US was actually going to bring charges for a financial crime. Where he will be greeted as a hero at the JFK airport by legions of Wall Street stock traders.
“Sarao’s ordeal has highlighted deep flaws within the regulation of the financial markets,” Andrew Katzen, partner at Hickman & Rose, said in an emailed statement.
“This goes some way to explaining why the usually hawkish U.S. authorities were so slow to act. It took them five years to bring any kind of formal sanction against Sarao, who was happily trading up until as recently as 2014. Small wonder that he is widely thought to be scapegoat,” he said.
No way this one guy was responsible for the flash crash. What he did is exactly what thousands of traders and hundreds of automated programs do every moment the market is open. Think of it this way. If one guy could rank the market, wouldn’t Russia/China/North Korea/The Boy Scouts have done it? Or at least hired that dude?
He’s getting railroaded. If one guy (or girl) can swing a massive market with just a home-built rig….then we better not piss off any nation states or groups who want to see the world burn…
Sarao’s trades allegedly used a “layering” strategy—a form of spoofing where “a trader places multiple, bogus orders that the trader does not intend to have executed.” These fake orders could manipulate a price by tricking other trading participants into believing there is either increased supply or demand for a security.
