Sarao had send dow jones on 1000 point downfall that world came to know as the 2010 flash crash.
Sarao was an indian based stock broker in UK. He was a
small trader who used to operate his trading from his home in London. He is a
protagonist for one the most harrowing moment in the wall street. 36 years of
age, he has no record of working for a big financial firm . But from the past 6
years he has been thumbing his nose to the regulators and trading illicitly. He
was very well known for spoofing i.e. changing , modifying or cancelling order
before they are even executed. When he was arrested, the officials recovered gargantuan
amount of algorithms pertaining to forgery. On May 6 2011 Navinder Singh Sarao
with the help of his firm used layering and spoofing to place on the order in
the UK stock market. With the help of his algorithm he change modified and
cancelled 19000 times before the trade was executed. At 2:45 pm he sent the derivative
market to plunge including the stock market. The Dow Jone industrial average
had faced a steep decline of 1000 points in its history.The market witnessed a
loss of 1trillion dollars. But due to its artificial creation with the help of
algorithms the market recovered back 600 points. On the same day Sarao had been
initiated a warning to stop his illicit trading. Ignoring the warning he
committed his deed. He had made 40 Million dollar from this lightning fast
trading and was also classified by his neighbours as introvert. 22 criminal charges have been plonked on him.
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| Sourced from The economic times |
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