REPORT: Accused Flash Crash trader Navinder Sarao is going to plead guilty

Navinder Singh Sarao, the London trader accused of causing the 2010 Flash Crash, is goingto plead guilty to fraud, Bloomberg reports, citing his lawyer.He was accused of "spoofing" theChicago Mercantile Exchange's futures marketwhich means making a large bet, waiting for the market toreact to it, and then canceling the trade and betting against other traders' reactions.Prosecutors say Sarao sparked a sudden market crashon May 6, 2010 in this way.He was recently extradited to the US from the UK.Sarao, 37, reportedly traded futures from his parents' basement in the suburbs of London.According to the complaint, heallegedly used an algorithm to manipulate the market for E-Mini S&P 500 futures contracts, or "E-Minis," on the CME."Sarao's alleged manipulation earned him significant profits and contributed to a major drop in the U.S. stock market on May 6, 2010, that came to be known as the 'Flash Crash,'"the Department of Justice said in a statement."On that date, the Dow Jones Industrial Average fell by approximately 600 points in a five-minute span, following a drop in the price of E-Minis."Hewas arrestedandcharged with one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation, and one count ofspoofing.Saraofaces up to 30 years in prison, according to Bloomberg, though it's unlikely he will receive a sentence that severe. Hespent four months in prison last year before securingbail.The case is U.S. v. Sarao, 15-cr-00075, U.S. District Court, Northern District of Illinois (Chicago).Read the full story on BloombergSEE ALSO:A Chicago 'spoofing' trial could reshape Wall Street trading lawJoin the conversation about this storyNOW WATCH: These are the business skills you learn from being in a gang
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