Government of the United States of America v Navinder Singh Sarao

Westminster Magistrates Court, District Judge Purdy, 23 March 2016

Extradition - Double criminality - Financial market trading - Market manipulation - Interests of justice - Right to private and family life - Abuse of process - Fraud Act 2002, section 2 - Financial Services and Markets Act 2000, section 397 - Financial Services Act 2012, section 89 - Extradition Act 2003, sections 83A and 137 - European Convention on Human Rights, article 8

The US government requested the defendant's extradition from the UK where he was born and resident. He was accused of electronically manipulating the Chicago Mercantile Exchange (CME) to make very substantial sums as the market either fell or climbed. The alleged manipulation involved trades worth approximately US$40 million. The time covered by the 22 charges ran from January 2009 to April 2014 and alleged that the defendant had made US$8.9 million from improper market manipulation or "spoofing". "Spoofing" is a type of layering and is described as manipulative, high speed activity where a trader places multiple bogus orders that the trader does not intend to have executed. Following this, the trader modifies the order at a different price, and either further modifies or cancels the orders before they are executed. In this way, other market participants are tricked into manipulating the market price which misleads investors. The defendant traded from his home using commercially available trading software including automated trading software. A key allegation was that the defendant had adapted the basic software programme to facilitate the market manipulation.