r/interesting • u/be_you_tiful- • 9d ago

Just Wow Bro cashed out way too much

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A man working from his parents' house in West London made tens of millions of dollars trading futures from a bedroom filled with stuffed toys. His name is Navinder Singh Sarao, and he's on the autism spectrum.

There was no Wall Street trading floor. Sarao worked out of the family home in Hounslow, using a customized trading program on an ordinary desktop computer, and by most accounts he lived a pretty quiet life.

Then came May 6, 2010. In a matter of minutes, US stock markets plunged, and nearly $1 trillion in value briefly vanished before prices bounced back. It became known as the Flash Crash.

Years later, US authorities said Sarao's spoofing helped make it worse. Prosecutors said he placed large sell orders he never intended to fill, then canceled them, which pushed prices down so he could profit from the swings. They said his strategy was running on the day of the crash, and that he made more than $40 million from this kind of trading over several years.

Sarao fought extradition from the UK for years. He eventually pleaded guilty to wire fraud and spoofing in the US. His lawyers pointed to his autism, and the judge sentenced him to time served followed by home confinement rather than more prison time, citing his cooperation with prosecutors.

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u/tombisch 9d ago

So instead of making sure the underlying issues are adressed end the responsible people, they once again found a scape goat??

17

u/letsburn00 9d ago

I've read the book about the crash. He had nothing to with it. It was a hedge fund in Chicago that miscoded one of it's Emini hedge functions.

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u/holdmyllm 9d ago

You are conveniently leaving out the facts that he wrote highly specific spoofing software that allowed him to spoof insane amounts of contracts in the book which is expressly against the terms of the exchange and illegal... If he didn't use his spoofing software, the hedge fund wouldn't have reacted to what it though was a huge market mover.

In short, hedge fund is stupid because it reacted to a spoofed signal, but the person spoofing is ultimately at fault.

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u/SargeUnited 9d ago

How are they stupid for reacting to a spoof? It’s not like they knew