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/LickinThighs2 8d ago

I am pretty dumb and financially illiterate, but like, isn't the point of holding stocks in their value and how it boosts your assets / portfolio, and therein the value in holding stocks being that you have assets to use to trade / loan against etc or access that value in liquid currency selling shares etc? Are you not allowed to just sell your shit and dip?

Was his crime just that he wasn't the class of rich that is above the law and gets away with pumping and dumping? (I mean I guess he got house arrest, so did kinda get away with it)

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u/thatsme55ed 7d ago

Buying and selling stocks is not a crime, doing stuff that makes the price of those stocks go up or down is.

This guy was manipulating the system that other people used to figure out the price of a stock.  

Its the same as lying to everyone in a collectible trading community that you have 500,000 of the rarest and most valuable items for sale, buying the real ones when their owners try to desperately unload them before the price crashes even further, and then telling everyone that the items were destroyed in shipping.  

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u/unexpectedfirefly 7d ago

That would be almost like buying stocks, declaring a war that makes said stock prices to skyrocket and then sell them

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u/SignificantEase3132 6d ago

yea but that would be illegal, so who would do such a thing?

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u/unexpectedfirefly 6d ago

Yes, i wonder. Nobody would do this kind of thing this year obviously

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u/ballinas167 6d ago

So when I buy or sell $5 it’s not a crime, but when selling $50 million it is, got it!

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u/_IzGreed_ 4d ago

It’s not buying or selling, it’s lying to people that you’re selling, making everyone selling at a low price so you can then buy all the low price stock then goes “oops” and profit from it.

Basically yell fire to cause chaos then loot stuff in the middle of it

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u/bobbo6969- 4d ago

To be fair to him, spoofing happens alllll the time.

He just didn’t have a corporate shield and lobbyists to bribe him out of trouble.

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u/Busy_Yogurtcloset648 4d ago

So it’s like the great Abby cape rise and crash of 2008.

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u/YouNeedAnne 4d ago

He placed sell orders he never intended to fill, and then cancelled them.

So he pretended he was going to be flooding the market when he wasn't. That made people think the stocks would be worth a lower amount in the future, and that made them seem worth a lpwer amount in the present. So if he boight them all then cancelled the sell orders, the value would go back up. That's lying for financial gain, or fraud.