February 18, 2017

How the Flash Crash Trader Navinder Singh’s $50 Million Fortune Vanished

It took Navinder Singh Sarao a long time to accept that he might have been scammed out of $50 million. Stuck in London’s Wandsworth prison, wracked with anxiety and unable to sleep, the realization dawned on the man dubbed the “Flash Crash Trader” as slowly as spring turned to summer outside the barred window of his jail cell.

The trauma of the past few weeks had been difficult to process. On April 20, 2015, the slight, doe-eyed 36-year-old had dozed off peacefully in the same suburban bedroom he’d slept in since he was a boy. The next day he was arrested and taken to a police station, where he was charged with 22 counts of fraud and market manipulation carrying a maximum sentence of 380 years.
......................

Where’s the money, Nav, his lawyers wanted to know. Sarao couldn’t make bail, they gradually learned, because the bulk of his wealth was tied up in investments and offshore trusts, each more complicated than the last. Days in Wandsworth prison, a Victorian-era fortress where Sarao was housed with sexual predators and violent offenders, turned into weeks.

After four months of dead ends, his legal team struck a deal with the authorities: If the U.S. Justice Department and the Commodity Futures Trading Commission agreed not to oppose a reduction in bail to 50,000 pounds, the firm would act as a bounty hunter, taking on responsibility for tracking down the missing millions on the condition that its fees be paid if it did.

They were going down a rabbit hole. A review of Sarao’s investments from 2005 to the present day, based on dozens of interviews and thousands of pages of documents, reveals another twist in an already remarkable story. Navinder Sarao, the trading savant accused of sabotaging the world’s financial markets from his bedroom, may himself have been the naïve victim of what his lawyers portray as a series of cons that stripped him of almost every cent he earned

Read more at https://www.bloomberg.com/news/features/2017-02-10/how-the-flash-crash-trader-s-50-million-fortune-vanished - excellent weekend reading.

No comments:

Post a Comment

Share this...