Washington/Chicago: The UK futures trader blamed for his role in the May 2010 Wall Street flash crash went through a rapid succession of brokerages that cleared his trades on the CME, documents filed in court showed.
Navinder Singh Sarao, who was arrested in the UK this week on U.S. charges he manipulated futures markets, did business with now defunct MF Global, Marex, Knight Futures and finally R.J. O`Brien, the documents showed.
R.J. O`Brien "had no involvement in the trading decisions" made by Sarao, or his company, a spokeswoman for the firm said, adding that they had cooperated with authorities.
"RJO had no involvement whatsoever with the individual or his company at the time of the Flash Crash in 2010 or for several years thereafter," she said.
Sarao, 36, is accused by U.S. authorities of using an automated program to "spoof" markets by generating large sell orders that pushed down prices.
He then cancelled those trades and bought the contracts at the lower prices, reaping a roughly $40 million profit on his trading, authorities have said.
The flash crash on May 6, 2010 saw the Dow Jones Industrial Average briefly slide over 1,000 points, temporarily wiping out nearly $1 trillion in market value.
In a complaint, the U.S. Department of Justice said Sarao`s activities "contributed to the order book imbalance" that was a factor in the plunge.
