November 9, 2016
CFTC Submits Proposed Consent Order to Federal Court in Chicago that Would Resolve the CFTC’s Price Manipulation and Spoofing Action against U.K. Resident Navinder Singh Sarao
Sarao Pleaded Guilty to Spoofing and Wire Fraud Charges in a Related Criminal Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it submitted a proposed Consent Order that would resolve its civil enforcement action in the U.S. District Court for the Northern District of Illinois against Navinder Singh Sarao (Sarao). The CFTC Complaint charged Sarao, along with his company Nav Sarao Futures Limited PLC, with unlawfully manipulating, attempting to manipulate, spoofing, and use of a manipulative device — all with regard to the E-mini S&P 500 near month futures contract (E-mini S&P) (see the CFTC Complaint and Press Release 7156-15, April 21, 2015).
In the proposed Consent Order, Sarao admits to the allegations in the CFTC Complaint, as well as to findings of fact and conclusions of law that Sarao:
• successfully manipulated the E-mini S&P on at least 12 days between April 27, 2010 and March 10, 2014 (including May 6, 2010, commonly known as Flash Crash Day);
• attempted to manipulate the E-mini S&P tens of thousands of times between April 2010 and April 17, 2015;
• placed tens of thousands of bids and offers that he intended to cancel before execution (i.e., spoof orders) between July 16, 2011 and April 17, 2015; and
• employed or attempted to employ a manipulative device, scheme, or artifice to defraud in connection with his spoof orders between August 15, 2011 and April 17, 2015.
The proposed Consent Order, which was filed jointly by the CFTC and Sarao for the court’s consideration and review, also seeks imposition of more than $38 million in monetary sanctions, permanent trading and registration bans, and permanent prohibitions against further violations of the Commodity Exchange Act and CFTC Regulations, as charged, against Sarao.
Related Criminal Action
Today, Sarao pleaded guilty in the U.S. District Court for the Northern District of Illinois to one count of spoofing and one count of wire fraud in a related criminal action. Sarao was arrested by British authorities acting at the request of the U.S. Department of Justice and in conjunction with the Federal Bureau of Investigation on April 21, 2015 and recently extradited to the United States.
The CFTC Division of Enforcement staff members responsible for this matter are Jeff Le Riche, Jo Mettenburg, Jenny Chapin, Allison Sizemore, Carlin Metzger, Elizabeth Padgett, Mary Lutz, Jordon Grimm, Rick Glaser, and Charles Marvine, as well as former Division of Enforcement staff member Jessica Harris.
The CFTC thanks and acknowledges the assistance of the Chicago Mercantile Exchange, the U.S. Department of Justice, the Federal Bureau of Investigation, the U.K. Financial Conduct Authority, the Guernsey Financial Services Commission, and the Metropolitan Police International Assistance Unit, Scotland Yard. The CFTC also recognizes the cooperation of the Securities and Exchange Commission.
Last Updated: November 9, 2016