On May 6 2010, when the US stock markets plunged 600 points and rebounded within 20 panic-stricken minutes — an event that became known as the “flash crash” — an independent trader from west London received a warning about his behaviour from the US’s largest futures exchange.
It was the third warning the Chicago Mercantile Exchange had sent to Navinder Singh Sarao, the 36-year-old British-born trader, and his broker, for placing and then quickly cancelling orders — a practice known as “spoofing”. Orders were “expected to be entered in good faith for the purpose of executing bona fide transactions”, the CME told him.
If this worried him at all, however, Mr Sarao could at least console himself with the fact that, by the time the market closed, he had made $879,018. And two weeks later, he would brag to his broker that he had told the CME to “kiss my ass”.