Indian-origin flash crash trader loses extradition case in London

Navinder Singh Sarao, the British trader accused of making $40 million by fooling markets and contributing to the 2010 flash crash, lost an extradition ruling in London, moving him a step closer to being sent to face charges in the US.

The 37-year-old will appeal on Wednesday's decision by judge Quentin Purdy to the high court after the ruling has been signed off by the Home Secretary Theresa May, which is largely seen as a rubber stamp. He remains free on bail.

"We're disappointed," his attorney Richard Egan told reporters. "We had a strong argument."

Prosecutors allege Sarao made $40 million over four years by spoofing CME Group's stock futures market, including a $900,000 profit on May 6, 2010, when a trading frenzy known as the 'flash crash' saw almost $1 trillion briefly wiped from the value of American equities. US authorities allege Sarao contributed to the mayhem and have been seeking his extradition so he can be put on trial.

Sarao's lawyers sought to undermine US claims at a hearing last month by arguing his actions weren't a crime in the UK and, as a British citizen, any trial should take place in England. The prosecution countered that while Sarao was in the UK, most of the damage was on a US trading platform, adding the UK Financial Conduct Authority carried out its own investigation and didn't pursue charges. May has two months to approve the extradition, the court said, while also acknowledging it wasn't a ruling on his guilt or innocence.