He made bail obviously he had a lot more than $100k. He lived at home because that's the Indian culture and he was living in his parents house who were working class folk. Authorities called him in for questioning and on May 25th 2010 he wrote in response "kiss my ass" so yes, they did know about him and have been trying to bring him to justice since 19 days after the event. As Southall mentioned he is a "tax avoider" thus his mother had to keep working to jobs....
Opened fund, made enough commissions to close it after about 15 months, and traded since then only my own money. Never had US clients, i was not US citizen, and fund was not in the US. Did send a few months later my answer to the remarks of the CFTC in not so very nice words to show that they were idiots. Pity that I did so much work to become registered as CTA, all for nothing. Stopped paying for NFA so CTA was finished too.
What software was this guy using? As in press reports it said it was commercially available. Are any HFT techniques available to the private trader? I must be trading wrong, i just look at a chart.
1. Trying is good, succeeding is better. Suddenly when they only had 2 weeks left of the statue of limitations, they succeeded. 2. OK, somebody correct my math, but what is better?: a/ Pay your taxes and live a rich or at least fairly upper class life, letting your mom retire. b/ Try to avoid taxes while your mama has to work and you drive your parents shitty car. It is really a hard choice.... Anyhow, if he is on bail and he has access to some of his money he should skip bail and move to Vietnam or whatever, because he is going to get screwed royally by the US if history taught us anything. Here is an example: A guy from Australia was extradited mostly for moderating a drug forum (repeat he was a moderator) and now facing life in prison. I am not kidding.... http://www.reuters.com/article/2015/03/13/us-usa-bitcoin-silkroad-idUSKBN0M92G820150313
Dear CFTC: Thank you! Thank you, because 6 years after we warned about the dangers from predatory HFT including such parasitic "strategies" as spoofing (or layering, which together with the DOJ you have now confirmed is illegal), quote stuffing, flash trades, momentum ignition, sub-pennying, ISOs, and countless others, you have confirmed everything we have said. So we have decided to return the favor. Just because we know how serious you are in your quest to root out all market rigging, or as you put it in your charge against Navinder Sarao "manipulation or attempt to manipulate the price of the intra-day contract price for the near month of the E-mini S&P," we have decided together with Nanex to once again give you a helping hand, and point out all the spoofing that has taken place in the E-mini or ES. Just today. The chart below shows a contract count of just the buy orders added/canceled/executed in the 1 hour interval between 11 and 12pm in the ES: And here are the "sales": To remind you, this is what irritated you in the Sarao document: ... Defendants used the Layering Algorithm to place hundreds of orders for tens of thousands of contracts that were modified thousands of times and eventually canceled over 99% without ever resulting in a trade. As you can see the vast, vast majority of ES contracts just before lunch today was cancelled without ever resulting in a single trade. And, we are confident, since Mr. Sarao is currently either in custody or on bail, without access to the internet, one can't blame today's massive E-mini spoofing on the flash crashing mastermind. Since we are confident you intend to root out this evil market scourge at the root, we are also providing you with examples of spoofing in oil, in US Treasurys, and in gold. Finally, since like you we are confident the investing public's faith in the broken market must be restored at all costs, we will make this article into a daily feature showing every single day the hundreds of thousands of spoofed ES contracts, openly "manipulating" (in your own words), the so-called market. We will stop once you, dear CFTC, have rooted out all the spoofing, all the momentum ignition, all the sub-pennying, all the quote stuffing. In short - the endless manipulation. Now, go get 'em! P.S. if you are unsure who the spoofer is, call us - we will be delighted to tell you: we don't even want the whistleblower award.
From Macro Man: Building a better moustrap Posted by Macro Man on Thursday, April 23, 2015 with 6 comments Readers who frequent the comments section have been treated to a spirited discussion over the past couple days surrounding the arrest of Nav Sarao, a futures trader accused of manipulating S&P 500 E-mini futures and acting as a "significant factor" in the Flash Crash of May 2010. Mr. Sarao is a bloke who trades from his bedroom at his parents' house near Heathrow Airport. The suggestion is that Mr. Sarao layered a number of 600-lot offers in E-minis, which apparently scared the bejeezus out of the financial world and forced a huge number of market participants to simultaneously panic, selling stocks with literally reckless abandon. For masterminding this financial maelstrom, he cleared less than a million bucks. By Macro Man's reckoning, that makes him either the worst evil genius or the biggest patsy we've seen in quite some time. This is not, of course, to condone the sort of behaviour in which Mr. Sarao was allegedly engaging. Spamming phony orders is a reprehensible practice, and as a punter there is nothing more frustrating than trying to pay an offer that you see on screen only for it to magically disappear the moment you click "Buy." However, given the prevalence of similar and even more morally dubious practices in single-stock world, it is bemusing to say the least that the only entity to be arrested (to Macro Man's knowledge, at least) is a small-fry punter who conveniently happens to be a foreign national. No mention at all has been made of the HFT algos, for whom spamming phony orders and front-running is a (very profitable) way of life. When it comes to the Matrix, it appears that the regulators have thus far decided to take the blue pill. Macro Man is hardly alone in his skepticism. He has unsurprisingly been chatting offline with a few mates with many years of experience at the coal face of financial risk taking, and no one has thought the situatio0n anything short of absurd. In the context of one of these conversations, one friend offered a suggestion on how to replace the badly-broken market mechanism with a few simple rules to replace many of the current Byzantine regulations: 1) If you are acting as an agent and an order for a client gets filled (full or partial), then the client gets filled at the execution price- no front-running allowed. 2) You cannot submit any orders for more size than your margin currently supports. 3) Any order submitted to an exchange or market must remain valid for a non-quantum length of time (call it one second) before it may be cancelled. 4) If you buy or sell something, you must make or take delivery within the specified amount of time. Failure to do so should incur a hefty financial penalty (scalable for repeat offenders) and a ban from further trading until delivery is made/taken. To this, Macro Man added a fifth: 5) All participants trading on an exchange should incur the same exchange fees. Exceptions can be made for locals trading in open outcry pits. Macro Man is curious what readers make of these suggestions and whether they have a few good ones of their own....
Did a British bounty hunter blow the whistle on flash crash trader Navinder Sarao? US financial investigators say whistleblower pointed them towards Navinder Sarao and refuse to confirm whether tipster is British Navinder Sarao was arrested after a whistleblower contacted the US authorities Photo: Telegraph Media Group By Philip Sherwell, in New York, and Gordon Rayner 1:30PM BST 23 Apr 2015 A bounty-hunter triggered the US investigation into alleged rogue trader Navinder Sarao after conducting their own private investigations into the cause of the £500 billion Wall Street Flash Crash. The whistleblower, who has asked for their identity to be kept secret, could receive a multi-million pound reward if Mr Sarao is convicted and his assets are recovered. Under US law, a whistleblower from anywhere in the world is eligible for a bounty of between 10 and 30 per cent of any funds in excess of $1 million recovered in a prosecution brought as a result of the information they have supplied. With Mr Sarao accused of making £26.7 million illegally, that could mean a reward of up to £8m. Navinder Sarao's home in Hounslow The whistleblower spent “hundreds of hours” investigating the flash crash over the course of several years and determined that a single trader had a major impact on the market that day, his American lawyer Shayne Stevenson told The Telegraph. He said his client wanted his nationality to be kept secret and would not discuss whether he or she is British. Mr Stevenson said that his client brought “powerful original analysis” to the US Commodity Futures Trading Commission of market manipulation over a long period. The US government then conducted its own investigations into his findings and came to the same conclusions, he added. • Flash crash trader 'a prankster who always got away with it' • What we know so far about the Flash Crash arrest "To anyone doubting the impact this manipulative behavior has had on the largest liquid futures market in the world, the data speaks for itself,” said Mr Stevenson, who works with a Seattle law firm, Hagens Berman Sobol Shapiro, that specialises in financial whistleblower cases. “This ground-breaking international enforcement action should both deter ongoing market manipulation and encourage more whistleblowers to come forward.” Mr Sarao, 36, of Hounslow, west London, is accused of using computer programmes to illegally manipulate prices on a US trading market, contributing to the flash crash of May 2010 in which £500 billion was wiped off the value of the market in a matter of minutes. He denies wrongdoing and is fighting extradition to the US.