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Flash crash trader Sarao admits CFTC charges and pleads guilty in criminal action

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The US Commodity Futures Trading Commission (CFTC) has submitted a proposed consent order that would resolve its civil enforcement action in the US District Court for the Northern District of Illinois against Navinder Singh Sarao. 

The CFTC complaint charged British futures trader Sarao, along with his company Nav Sarao Futures Limited, with unlawfully manipulating, attempting to manipulate, spoofing, and use of a manipulative device — all with regard to the E-mini S&P 500 near month futures contract. 
 
In the proposed consent order, Sarao admits to the allegations in the CFTC complaint, as well as to findings of fact and conclusions of law that he successfully manipulated the E-mini S&P on at least 12 days between 27 April 2010 and 10 March 2014 (including 6 May 2010, commonly known as Flash Crash Day); attempted to manipulate the E-mini S&P tens of thousands of times between April 2010 and 17 April, 2015; placed tens of thousands of bids and offers that he intended to cancel before execution (i.e. spoof orders) between 16 July 2011 and 17 April 2015; and employed or attempted to employ a manipulative device, scheme, or artifice to defraud in connection with his spoof orders between 15 August 2011 and 17 April 2015.
 
The proposed consent order, which was filed jointly by the CFTC and Sarao for the court’s consideration and review, also seeks imposition of more than USD38 million in monetary sanctions, permanent trading and registration bans, and permanent prohibitions against further violations of the Commodity Exchange Act and CFTC Regulations, as charged, against Sarao. 
 
Sarao pleaded guilty in the US District Court for the Northern District of Illinois to one count of spoofing and one count of wire fraud in a related criminal action. 
 
Sarao was arrested by British authorities acting at the request of the US Department of Justice and in conjunction with the Federal Bureau of Investigation on 21 April 2015 and recently extradited to the US.  

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