'Hound of Hounslow' allowed to return to UK after pleading guilty to helping trigger Wall Street 'flash crash'

  • London
  • USA
Navinder Singh Sarao Credit: Daniel Leal-Olivas/PA Wire

The financial trader dubbed the Hound of Hounslow has been allowed to return to the UK from the US after admitting helping to trigger a multi-billion dollar Wall Street crash from his parents' west London home.

Navinder Singh Sarao made at least £10.3 million over several years through market manipulation schemes, including helping to cause a "flash crash" in 2010, according to US prosecutors.

The talented mathematician could still go to jail for decades for manipulating the Chicago Mercantile Exchange and causing the Dow Jones to plummet, rattling investors in the process and leaving many wondering if the market was rigged.

However, a US judge agreed to release the 37-year-old on a £604,000 bond secured against his parents' Hounslow semi-detached home while he helps investigators.

Sarao's parents' home in Hounslow from where he admitted helping to trigger the 'flash crash'. Credit: PA

Sarao was sent to the US in October after losing a High Court challenge against a decision to extradite him over the market manipulation, which caused the Dow Jones Industrial Average plunge 600 points in five minutes, wiping tens of billions of pounds off the value of US shares.

During court appearances in the UK, US authorities claimed that Sarao made around £716,000 on May 6, 2010, the day of the crash, and he faced 22 charges carrying sentences totalling a maximum of 380 years.

On Wednesday Sarao appeared in court in Chicago where he admitted one count of wire fraud and one of spoofing, which refers to bidding with the intent of quickly cancelling the bid to manipulate prices, under a plea bargain.

According to documents filed with the court he emailed a broker in the wake of flash crash bragging how he told a Chicago exchange official who questioned his trades "to kiss my" behind.

However he also wrote that he had carried out some trade merely to show a friend how the high frequency trading market worked.

Defence lawyer Roger Burlingame told the court that his socially awkward client had lived in the same room at his parents' house for most his life.

Prosecutors said his co-operation would be more effective if he was not behind bars, although Sarao was warned he risked "destroying his parents' lives" if he violates the terms of his bond.

If he fully co-operates with investigators prosecutors may ask for a prison term of less than six-and-a-half years.