Navinder Sarao gets off the hook
Navinder Sarao lived at home, had autism and was a savant at trading the markets. He did it through his ability to instantly recognize patterns and react to them quickly and efficiently. He also followed the orders viewable of the market closely closely.
During his trading, he noticed that there were certain orders that would appear for stocks and suddenly disappear when the price got close to being executed. That action is called spoofing the market and is designed to tempt other traders to enter the market ahead of the orders and then pull the rug from under them at the last second. If you are good enough (read quick enough), you can easily manipulate the market price action via the spoofed orders, and follow up with real trades often in the other direction for a tidy profit. Meanwhile the spoofed traders were often left wondering "what just happened". It's like getting pickpocketed.
Spoofing is also illegal.
Sarao, who took trading and made it his passion to be the best noticed the spoofing. His autistic condition could not understand how could exist. So he contacted regulatory authorities and told them what was going on on a regular basis. The regulators ignored his complaints. As a result, he thought if you can't beat them, when not join them (also a trait of autistic people). By not pursuing the spoofers, it was a signal to him that spoofing was ok.
At one point, he placed 2 million pounds worth of orders and changed them 1967 times to manipulate the market price and profit from his actions.
Then one day he was responsible for the 2010 flash crash in the E-mini S&P 500. In total, Sarao was accused of benefiting by $12.8 million. He was also arrested.
Sarao was not your typical market manipulator. He live with his parents and trade from the same bedroom that he grew up in. His biggest purchase was a used VW car that he purchased for 5000 pounds.
He certainly was not your typical white collar financial criminal, who spent the ill begotten fortunes on "wine, women and song" (and some fancy cars, boats and lavish vacations). He was just doing what he thought he could rightfully do as a trader and trading was his passion. Money was not his passion.
Now....over the course of amassing his trading fortune, his autism led to him being an easy target for Ponzi schemes and other financial swindlers looking for next big sucker with lots of money to burn. Sarao was their target.
It was his losses at the hands of the true white-collar criminals that led the authorities to use Sarao to their advantage in return for leniency for his crimes.
Long story short, the judge today could've sentenced him to 8 years in prison (he gave back all that was left of the his spoof gains - net of the losses to the schemers), but he sent him home with no sentence.
In a world where the white-collar criminals tend to get off when they shouldn't, I kinda feel that Navinder Sarao - although he got off for his crime - deserved to be let go.
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