“helped trigger a U.S. stock market “flash crash”” is IMHO just an exaggeration typical for U.S. justice: “kid better cooperate with us or you’ll get millions of years in prison.”
He earned 900k on that day. It doesn’t seem plausible.
The autism bit aside, it looks like why they got him in the first place was that a technique he used (spoofing) was illegal in the US.
Given he lives in England why was he extradited to the US? Is the summary that US has enough political power to have anyone who breaks US law wherever they are situated extradited and tried here?
Also, Britain also seems to give investors and banks undue influence over their judicial system. So it isn't so far fetched for them to throw a citizen to the wolves when it comes to committing crimes that impact the financial institutions of other nations, particularly the USA.
That's not because the victim was a person. That's because the perpetrator was an elite -- a member (via marriage) of the regime that is protecting her.
Essentially yes. The SDNY especially has a long arm and uses it aggressively. The US is the world police, although other countries are responding now. I actually think this is a major reason why blockchain and stablecoins will succeed longterm in becoming global financial rails - the US has weaponized the dollar and the dollarized banking system, which is pushing alternatives to develop out of genuine need.
He was not just minding his own business in the UK doing something legal there but not legal in the US; He was interacting with US Markets, hence the US Jurisdiction.
Is the definition of US markets based on where the exchange is headquartered?
The internet has made global crimes interesting, that's for sure. I would have thought the crime would have to be prosecuted in the criminal's home country given that's where he was doing the work from.
Yes. The law cares about where you have a "presence". Since the exchange is headquartered in the US and you send your orders there, you are doing business in the US, making you subject to US laws.
The law wants, amongst other things, justice for victims. So when your victims are in some country, expect to be tried there.
With many exceptions, don't most developed countries respect each other's laws? Certainly, if someone commits a traditional crime (burglary, assault, etc.) and flees to another country, they are usually extradited. In the modern world where you can commit electronic crimes without being physically present, it's harder to compile enough evidence against the accursed remotely to justify extradition, but it certainly happens regularly.
He was extradited to the US because there is an extradition treaty that gives the US the power to extradite people from the UK for meeting a reasonable suspicion test that they committed a crime in the US that is a crime in both countries and carries a sentence of at least a year.
The treaty is reciprocal. The UK has an equivalent right with respect to people in the US who committed a crime in the UK who meet a probable cause test. An independent review concluded that the two tests used in the two countries are worded differently but effectively equivalent.
As far as I know, this is the first UK extradition request to be denied by the USA, while the UK has denied at least 10 extradition requests to the USA.
The UK won't extradite for any crime that carries the death penalty, because they believe the death penalty is inhumane. I believe that accounts for all of their denials.
That is such a shameful abuse of diplomatic immunity. We give out diplomatic immunity because we recognize that diplomats have to live in a country they aren't loyal to and so want make them feel safe that they wont be charged with Treason or Espionage crimes. It's not for when you kill someone while driving recklessly...
I AM totally confused by this as well. We can't have it both ways. Let's think about this in a COMPLETELY different perspective.
Take elections as an example. Our 2016 elections were apparently never hacked, but there's a lot of conversation going on right now about "Russian Interference" but we're not specifically arresting Russians are we?
So what makes it OK for someone in a country we don't have extradition treaties with to just let them off the hook vs a country we do?
We actually do nab people who break the law in countries we can’t extradite from. People identified working in APT (advanced persistent threat) groups get labeled and watched, then grabbed when they travel to a country where the USA or affiliated can extradite.
It normally happens when they go somewhere warm for a vacation.
> then grabbed when they travel to a country where the USA or affiliated can extradite.
And some countries, Israel for example, have actually sent assets to other countries to flat out kidnap and smuggle them out. The (probably) most high profile example of this being the abduction, confinement, and smuggling of Adolf Eichmann by Shin Bet and Mossad personnel. There are films about this, one being Operation Finale.
That's a good way of putting it, because in a recent manslaughter case the US citizen (driving on the wrong side of the road) flew home on diplomatic immunity (a familial extension, not even the diplomat herself) and the US has refused extradition.
I think the immunity was eventually deemed not to apply (or at least to be questionable) but even if not there was precedent of a Briton's immunity being waived for extradition to America; a favour not repaid in this case.
Yes, exactly. This guy never left the uk, yet he committed a us crime? If China had this power they could extradite almost every single American who watches porn. The real fallacy is believing that laws have reason and logic behind them, that they are fair. Once you go down that path, you're done for. Once you realize that laws have no logic and their enforcement even less, you realize most criminals, like the one convicted in this story, just happen to be unlucky. Whether they actually harmed society is irrelevant and usually unknown. This is a perfect example of that. The machine that goes by the name "justice" is anything but and will chew out and spit anyone who gets in its way, regardless of facts, what happened, or even laws. The only sane thing is to stay out of its way, but once caught within, nothing matters.
Clearly, this sets an expectation that if you live in a country with extradition treaties with the US, you better be rich enough to afford a US lawyer or smart enough to understand all of its countless number of laws on every level. In other words, you just need to do something impossible. Surely that shouldn't be a problem should it?
>This guy never left the uk, yet he committed a us crime? If China had this power they could extradite almost every single American who watches porn.
Extradition usually requires it to be a crime in both countries. Ironically, due to obscenity laws, it might actually be possible to do it over porn in some edge cases.
>Clearly, this sets an expectation that if you live in a country with extradition treaties with the US, you better be rich enough to afford a US lawyer or smart enough to understand all of its countless number of laws on every level.
Unfortunately, this isn't even new. The case of Kim Dotcom shows just how ridiculously far US "law enforcement" can go at the behest of organizations such as MPAA/RIAA.
Incredible that it has taken 10 years for this case to be resolved. Still, he was only charged 5 years after the event apparently.
He caused the market to tank by billions of value but he only made $900k.
It is not like billions of dollars of value are destroyed when investors sell stock. It sounds like the market had a crash as they tend to sometimes do and in this case the authorities decided it was this guy who did it! I think that analysis is quite tenuous. Anyone who sold stock participated in the crash. It seems nuts to try to assign blame.
Yeah, how much the market tanks is fairly irrelevant since it's just a paper loss and will pop right back. More interesting is how much money various actors made/lost.
Market is a zero sum game (less the transaction costs), if someone lost then someone won. It's just those who lost are the ones who have big mouths, wallets and clients
On the intraday scale less the transaction costs and dividend payouts. Trades are trades, if one party buys the other party sells and vice versa; there's always two sides.
I don’t follow. If a stock keeps going up a share could change hands 10 times in a day, with 9 traders having positive realized PNL and 1 trader having positive unrealized PNL.
Exchange traded volume is still zero sum. Stock going up is driven by trades happening in the buy direction clearing the ask passive orders - someone had those limit orders there in the first place, and they're in the negative.
I'm only talking about intraday trading - FC wasn't caused by IPOs or dividends or other corporate actions. Whether you're taking profit or not doesn't matter - it's in the past. You lost the opportunity to close at a better profit at the end of the day - that's a relative loss.
considering every transaction gets taxed, and it's a zero-sum market.. there is no damage done overall. The opposite, actually. Money is raised for the government thanks to the activity.
It's possibly a foreign relations issue if the winners or losers are heavily biased towards one country or another. Like if all the winners were Russian and the losers were American
Is it zero sum? It seems net loss to me. Just consider the lifetime of a single share. Company IPOs and someone buys the share for $100. The share may pass through thousands of hands, some at a profit and some at a loss, but eventually that share value goes to zero and the net loss over the lifetime of the share is its IPO price. It's only possible to have a net gain if there's dividends paid out. Is there some other mechanism I'm missing?
I like where you're going with this but I think you're taking a big leap at "the net loss over the lifetime of the share is its IPO price". And not because of the "not every stock eventually goes to $0".
I also don't have a definitive answer however some things that play into the equation must be:
I think VWAP (Volume-weighted average price) also plays into how much money was made by people and how much was lost in aggregate. This specific share we are tracking along its lifetime might have exchanged hands a lot while it is going up and traded rarely during periods of decline.
Also the share could have been first purchased as a part of the options given to investors, employees, etc.
The market tanks because the stocks that make the index have dropped, a stock drops when someone is selling/buying at a lower price. Therefore someone sold at a lower price.
Perhaps those that sold at a lower price purchased another stock also at a lower price and there is an assumption the universe will balance it out.
But stocks drop at different % some institutions may choose to move to cash or another commodity temporarily. I don’t expect it’s a zero sum
A person who buys/sells the stock is responsible for their decision and it is no concern to anybody else if they are making or losing money. Particularly a flash crash. If they didn't want a stupid algorithm making their decisions for them they shouldn't have used a stupid algorithm.
I can understand the exchange rolling back half an hour of trading or whatever and calling it a wash. The idea that a trader is somehow liable for something seems absurd. Only thing he is guilty of is annoying powerful people.
Since the 80s it has been an integral part of society (at least in the UK and US) for citizens to invest their own money on the stock market — where “owning shares is as common as owning a car”:
Having protections in place to guard against market manipulation is a facet of this policy where all citizens are now traders (and not just a select group of well educated, well steeled stock market professionals.)
I don’t defend this policy, but I see why the former leads to the latter.
Another good reason to enforce a level playing field in capital markets comes about from another backbone of the 80s and 90s: placing national infrastructure like power, water, and pensions in the hands of private companies traded on the stock market, who need some form of protection on their share price.
> ... who need some form of protection on their share price ...
I expect it will be quite difficult to defend that position. The value of a company to its owners is more or less its expected earning potential. That is to say, low share prices in and of themselves don't necessarily cause bad outcomes for the shareholders in the long term and have no impact at all on the prospects of a company. There is no reason to protect something that isn't important. If anything, the very high returns vs share price should drive additional investment in the sector, although the link there is a bit tenuous and speculative if market manipulation is involved.
Personally I don't see a problem investors are forced to - crazy as it may seem - buy things because they want to own them for the long term.
Was this "market manipulation", or just dumb bots doing what they do?
I'm a normal citizen who holds shares. I remember I got an email alert when the flash crash happened, had a minor heart attack, and then reminded myself that I'm investing for the long term and it doesn't matter what the market does on any one particular day. In that case, it wasn't even a whole day before my portfolio had recovered.
Markets need to be fair and transparent, but you can't save people who panic-sell in a crash.
All citizens are not traders and virtually none of the ordinary people who trade stocks are doing it with a program that acts in fractions of a second. And those who were, deserve what they get.
This is like saying "because chainsaws are available everywhere to use without a license, we must make juggling them safe for all ages".
Well, ok, maybe we should forbid market orders to retail investors. Or make it a special privilege that you have to be approved for like margin and options.
Anyone who bought it, just as much. Heck, anyone who didn't buy it, as well. If more people had bought quicker, the price couldn't have declined, could it?
People are spoofing orders on big exchanges today, without even trying hard to cover it. If you have access to tick level market data and a bit of time you can find clear spoofing patterns fairly easily. Not on that scale, but enough to make money to pay some bonuses for sure
I'm not saying it isn't the case here, I've no idea (and the little I've read of his backstory is believably indicative), but this autism or Asperger's defence seems to be being raised every time a hacker gets arrested.
It seems to be becoming the new "depression" in leniency arguments hitting the headlines, at least for tech related miscreants.
I’ve watched plenty of prison TV shows and it would indeed be a far worse punishment for such a person and should very much be considered seriously by the courts in sentencing and bail hearings.
>> His lawyers said the time Sarao spent in jail in Britain was "unbearable" because of his autism, saying it amounted to "a torture of sensory stimulation, sleep deprivation and forced socialization," and that he became suicidal. They said they were concerned that Sarao may not be able to survive another stint behind bars.
His autism is clearly not on the mild side of the spectrum. He lives at home with his mom even as an adult and rarely leaves his room.
The courts are entirely capable of understanding this context, compared to say someone with a mild form of autism who can still be functionally social in forced situations. Not to mention when considering intent and motivation behind the crime (which a severe case of autism can no doubt play a role) during sentencing plus their willingness to accept fault.
But ultimately this person also returned $12M in funds me made from the loophole, was a first time offender with a stable future, and helped them catch other nefarious traders. So even without the autism stuff he had a very good argument against any prison time.
The idea that a mental deviation from the norm being used to explain someone's deviation from the norm is some sort of convenient excuse as you seem to imply doesn't lead to a fair society for everyone, just one where everyone who does not deviate gets to sit on a nice cushy throne while taking from the people who do.
My point is not about the genuine cases in which depression or other mental issues are a significant factor, rather that it seems at times to have become another default weapon in the defence lawyers armoury.
Of course, that might be a misconception on my part, but I see it quoted a lot in news coverage of cases as a mitigating factor.
Misuse and abuse of it will just undermine the cases of and support for genuine sufferers.
I disagree that it's the sole case, and also fail to see the relevance: Sarao is autistic, according to his own defense attorneys, and y'know, he probably is.
It's kind of a sensational thing to add to a headline, but that's how headlines have always worked.
I think the real issue not addressed is that the system is so flawed, that a "rogue trader" could mess with the market.
Let's imagine the typical US villain, Russia, North Korea, blah, blah. Let's say they have a few of their folks figure out weaknesses in the trading system then trade and then trigger a bunch of flash crashes everyday for a week or more. What will that do the market? How much billions would be lost?
The fact that it was only a flash crash and not a crash, I think actually shows the strength of the system. No one really panicked. If a flash crash happened every week, they would just slow down trades and push more to specialists. I don't think it would be as catastrophic as one might think. It would be a minor shake up.
that value wasn't "lost" from a holistic sense, but transfered to the counterparty. It's a good argument for why stop orders suck, though. the triggering mechanism is too easy to spoof in volatile/illiquid conditions.
Sure, I will. That's the risk of a stop loss, man. TANSTAAFL. The country doesn't lose anything because the value is transferred to whoever takes the other side.
Sure he did he's not stupid he understands fucking with the market has effects on people. Autistic people have a different sense of morality. Acting like an autistic genius can't understand that doing illegal things which contributes to the stock market crashing for the sake of profit is bad... Is mostly infantilizing.
I mean his lawyer argued that but his lawyer is trying to exploit people like yourself.
The person in the story may not be my patient but I've been around the block enough times to understand WHY it is being thought that he is incapable of moral reasoning.
I can speak to that subject without being a doctor. A doctor also in all honesty would almost certainly have less expertise in the subject than myself unless they were psychologists or similar.
I feel compelled to speak on the subject because the general attitude that autistic people are fundamentally amoral, fundamentally incapable of knowing right from wrong leads to stigma and mistreatment while not actually being true. The very idea that you have to consult a doctor to judge if an autistic person, not the highest functioning but far from the lowest, is capable of moral reasoning is an idea that leads to stigma and "othering" and exclusion and dehumanization. If I come off as aggressive it's because I see your beliefs as personally threatening.
If you read his reply / notes to the sec, he states how he was able to place orders without being front run. He asked developers to amend sierra chart. As a result, if placing a large contract order, rather than see price tick away from it he got instant fills.
Ive zero doubt this is why he was fingered. Taking from the hf funds.. who think they have some right to impose a defacto tobin tax on transactions and justify it by calling themselves "liquidity providers!" He is guilty of spoofing, but the flood is caused by bots, or when they stop playing. He mentions his networth was constructed mostly over 50 days. On ' normal days ' you have to contend with smaller ranges where entries are key and those sort of intant fills are a massive advantage. Of course since he documented it the cat got out of the bag, many that had used this method were super annoyed!
Bitmex seems to be the new wild west these days, all those techniques are used and more with 0 accountability
I'm surprised this article doesn't mention the lengths he went to hide his money using shell companies. Makes me question the "he regarded trading as a video game in which the object was to compile points not money" narrative. (on the flipside, if I ever get arrested for manipulating markets, I'm hiring this guy's lawyer)
Per the official criminal complaint document:
Around the time of the Flash Crash, SARAO took significant steps to protect his assets. In late April 2010, SARAO established a new entity, Nav Sarao Milking Markets Limited, which was incorporated in Nevis. SARAO appears to have created this company as part of a tax avoidance strategy pursuant to which he also established, in 2012, International Guarantee Corporation, incorporated in Anguilla.[1]
He was trying to minimize his tax bill. He hired a tax consultant who ended up being fraudulent. This same consultant also introduced him to other fraudsters who extracted money from Sarao.
I am very unfamiliar with how the financial market works, maybe someone here on HN can answer this question:
How can a single person with an internet connection (that's my understanding of the 'from his parents home' part) trigger an event that causes US markets to crash and wipe (albeit temporarily) billions of dollars?
I mean, this guy was 'only' in it for the money. Could someone with much worse motives just trigger a crash like this on demand?
In trading there is a queue for buys and sells, marked at quantity and price. This describes an attribute for that market called liquidity.
I have, at a given timestamp, a queue of orders that must be fulfilled in accordance with a strict set of rules.
By playing the rules and advertising bids with a lowlatency connection fast enough to impact the bid price, whilst canceling and not fulfilling that order, say 250us later. You can make a position to take advantage of that artificial price move that you caused.
But the article says that Sarao did this from his parent's house. Would a residential internet connection be sufficient to perform such spoofing?
The way you describe it, spoofing sounds like an easy way to make money, as long as you have enough capital and a fast internet connection, like with arbitrage. But there must be some limitation to this, right? Could anyone (like me) do spoofing and cause a flash crash?
It's possible to buy a colo at an exchange for $$$ and push to prod from the house. Algorithmic trading is...algorithmic. trade decisions are encoded into the algorithm, decisions based on market feed info such as last executed orders, volume, etc.
The idea is you take a previous trading intraday execution data set, profile out volume per second, execution prices, etc. Then encode a proprietary datascience backed decision tree for dispatching buy sell messages.
In this case "from his parents' house" could mean that's where _he_ was acting from. The code in question could have been executed on an AWS instance or some other cloud hosting provider with insane connection speeds and computing resources (just speculation).
Why not put in a rule that every bid must stay in effect for 5 seconds? What's the market benefit to allowing a bid to be cancelled 250us later? Seems like only really useful for manipulation.
The guy is 41 years old and lives with his parents in the same bedroom he had as a kid. He has never been able to perform basic tasks like doing his own laundry or otherwise properly caring for himself. In addition, he spent essentially none of the money - the court case is clear on that point - and he was vulnerable enough that all of the funds were taken from him by fraudsters.
Seems fair. All those guys who caused the 2008 crash, which actually hurt hundreds of millions of people, got sentenced too, so equality before the law and all that.
Oh wait, actually they were "punished" by being bailed out with billions of public dollars.
Well its all fun and games until the next revolution...
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[ 3.1 ms ] story [ 154 ms ] threadHe earned 900k on that day. It doesn’t seem plausible.
I would say in spite of that that this is one of those rare cases where the justice system comes back with a fair sentence.
Given he lives in England why was he extradited to the US? Is the summary that US has enough political power to have anyone who breaks US law wherever they are situated extradited and tried here?
I don’t know why this was downvoted. Recent events have proved that if the victim is a British motorcyclist, for example, extradition does not apply.
https://www.bbc.co.uk/news/uk-england-northamptonshire-51228...
The internet has made global crimes interesting, that's for sure. I would have thought the crime would have to be prosecuted in the criminal's home country given that's where he was doing the work from.
The law wants, amongst other things, justice for victims. So when your victims are in some country, expect to be tried there.
https://securityboulevard.com/2018/04/do-cybercriminals-ever...
The treaty is reciprocal. The UK has an equivalent right with respect to people in the US who committed a crime in the UK who meet a probable cause test. An independent review concluded that the two tests used in the two countries are worded differently but effectively equivalent.
My information is from https://uk.usembassy.gov/our-relationship/policy-history/the.... Check the section on why it is easier to extradite in one direction versus the other. (Which hasn't yet been updated to include this refusal.)
Take elections as an example. Our 2016 elections were apparently never hacked, but there's a lot of conversation going on right now about "Russian Interference" but we're not specifically arresting Russians are we?
So what makes it OK for someone in a country we don't have extradition treaties with to just let them off the hook vs a country we do?
In other words, the world is TOTALLY BONKERS.
I mean specifically, am I breaking a law in the next sentence in China and should be arrested and put in a prison camp in CHINA for this: So this happened: https://en.wikipedia.org/wiki/1989_Tiananmen_Square_protests
It normally happens when they go somewhere warm for a vacation.
And some countries, Israel for example, have actually sent assets to other countries to flat out kidnap and smuggle them out. The (probably) most high profile example of this being the abduction, confinement, and smuggling of Adolf Eichmann by Shin Bet and Mossad personnel. There are films about this, one being Operation Finale.
Other countries have done this to varying levels, including the United States. Some can be found starting at this point in the extraordinary rendition wiki entry https://en.wikipedia.org/wiki/Extraordinary_rendition#Histor...
You've actually escalated to assassinating people (ref: Soleimani)
I think the immunity was eventually deemed not to apply (or at least to be questionable) but even if not there was precedent of a Briton's immunity being waived for extradition to America; a favour not repaid in this case.
So yes, 'political power' indeed.
This scares me a great deal. Totally bonkers totalitarianism from a rogue state.
Clearly, this sets an expectation that if you live in a country with extradition treaties with the US, you better be rich enough to afford a US lawyer or smart enough to understand all of its countless number of laws on every level. In other words, you just need to do something impossible. Surely that shouldn't be a problem should it?
Extradition usually requires it to be a crime in both countries. Ironically, due to obscenity laws, it might actually be possible to do it over porn in some edge cases.
>Clearly, this sets an expectation that if you live in a country with extradition treaties with the US, you better be rich enough to afford a US lawyer or smart enough to understand all of its countless number of laws on every level.
Unfortunately, this isn't even new. The case of Kim Dotcom shows just how ridiculously far US "law enforcement" can go at the behest of organizations such as MPAA/RIAA.
Interestingly, he also lost his entire $50 million fortune to a bunch of terrible investments, including some downright frauds.
Related article (goes into details about how he lost his money): https://www.livemint.com/Money/TYUUtwYOj0VIPhFFyLICQM/How-fl...
https://www.sec.gov/news/studies/2010/marketevents-report.pd...
He caused the market to tank by billions of value but he only made $900k.
It is not like billions of dollars of value are destroyed when investors sell stock. It sounds like the market had a crash as they tend to sometimes do and in this case the authorities decided it was this guy who did it! I think that analysis is quite tenuous. Anyone who sold stock participated in the crash. It seems nuts to try to assign blame.
It's possibly a foreign relations issue if the winners or losers are heavily biased towards one country or another. Like if all the winners were Russian and the losers were American
I also don't have a definitive answer however some things that play into the equation must be:
I think VWAP (Volume-weighted average price) also plays into how much money was made by people and how much was lost in aggregate. This specific share we are tracking along its lifetime might have exchanged hands a lot while it is going up and traded rarely during periods of decline.
Also the share could have been first purchased as a part of the options given to investors, employees, etc.
Perhaps those that sold at a lower price purchased another stock also at a lower price and there is an assumption the universe will balance it out. But stocks drop at different % some institutions may choose to move to cash or another commodity temporarily. I don’t expect it’s a zero sum
That is what I know, am I missing something ?
I can understand the exchange rolling back half an hour of trading or whatever and calling it a wash. The idea that a trader is somehow liable for something seems absurd. Only thing he is guilty of is annoying powerful people.
https://www.margaretthatcher.org/document/106145
Having protections in place to guard against market manipulation is a facet of this policy where all citizens are now traders (and not just a select group of well educated, well steeled stock market professionals.)
I don’t defend this policy, but I see why the former leads to the latter.
Another good reason to enforce a level playing field in capital markets comes about from another backbone of the 80s and 90s: placing national infrastructure like power, water, and pensions in the hands of private companies traded on the stock market, who need some form of protection on their share price.
I expect it will be quite difficult to defend that position. The value of a company to its owners is more or less its expected earning potential. That is to say, low share prices in and of themselves don't necessarily cause bad outcomes for the shareholders in the long term and have no impact at all on the prospects of a company. There is no reason to protect something that isn't important. If anything, the very high returns vs share price should drive additional investment in the sector, although the link there is a bit tenuous and speculative if market manipulation is involved.
Personally I don't see a problem investors are forced to - crazy as it may seem - buy things because they want to own them for the long term.
I'm a normal citizen who holds shares. I remember I got an email alert when the flash crash happened, had a minor heart attack, and then reminded myself that I'm investing for the long term and it doesn't matter what the market does on any one particular day. In that case, it wasn't even a whole day before my portfolio had recovered.
Markets need to be fair and transparent, but you can't save people who panic-sell in a crash.
This is like saying "because chainsaws are available everywhere to use without a license, we must make juggling them safe for all ages".
Well, ok, maybe we should forbid market orders to retail investors. Or make it a special privilege that you have to be approved for like margin and options.
Anyone who bought it, just as much. Heck, anyone who didn't buy it, as well. If more people had bought quicker, the price couldn't have declined, could it?
It seems to be becoming the new "depression" in leniency arguments hitting the headlines, at least for tech related miscreants.
>> His lawyers said the time Sarao spent in jail in Britain was "unbearable" because of his autism, saying it amounted to "a torture of sensory stimulation, sleep deprivation and forced socialization," and that he became suicidal. They said they were concerned that Sarao may not be able to survive another stint behind bars.
His autism is clearly not on the mild side of the spectrum. He lives at home with his mom even as an adult and rarely leaves his room.
The courts are entirely capable of understanding this context, compared to say someone with a mild form of autism who can still be functionally social in forced situations. Not to mention when considering intent and motivation behind the crime (which a severe case of autism can no doubt play a role) during sentencing plus their willingness to accept fault.
But ultimately this person also returned $12M in funds me made from the loophole, was a first time offender with a stable future, and helped them catch other nefarious traders. So even without the autism stuff he had a very good argument against any prison time.
The idea that a mental deviation from the norm being used to explain someone's deviation from the norm is some sort of convenient excuse as you seem to imply doesn't lead to a fair society for everyone, just one where everyone who does not deviate gets to sit on a nice cushy throne while taking from the people who do.
Of course, that might be a misconception on my part, but I see it quoted a lot in news coverage of cases as a mitigating factor.
Misuse and abuse of it will just undermine the cases of and support for genuine sufferers.
It's kind of a sensational thing to add to a headline, but that's how headlines have always worked.
Let's imagine the typical US villain, Russia, North Korea, blah, blah. Let's say they have a few of their folks figure out weaknesses in the trading system then trade and then trigger a bunch of flash crashes everyday for a week or more. What will that do the market? How much billions would be lost?
(A child can pull the trigger that kills the person, but maybe he was told that pulling the trigger will make the person laugh...or whatever.)
I mean his lawyer argued that but his lawyer is trying to exploit people like yourself.
I can speak to that subject without being a doctor. A doctor also in all honesty would almost certainly have less expertise in the subject than myself unless they were psychologists or similar.
I feel compelled to speak on the subject because the general attitude that autistic people are fundamentally amoral, fundamentally incapable of knowing right from wrong leads to stigma and mistreatment while not actually being true. The very idea that you have to consult a doctor to judge if an autistic person, not the highest functioning but far from the lowest, is capable of moral reasoning is an idea that leads to stigma and "othering" and exclusion and dehumanization. If I come off as aggressive it's because I see your beliefs as personally threatening.
The irony is that he had millions in assets in the first place. Lol.
https://www.businessinsider.com/emails-sent-by-trader-navind...
You just blew my mind there. Of course!
Per the official criminal complaint document:
Around the time of the Flash Crash, SARAO took significant steps to protect his assets. In late April 2010, SARAO established a new entity, Nav Sarao Milking Markets Limited, which was incorporated in Nevis. SARAO appears to have created this company as part of a tax avoidance strategy pursuant to which he also established, in 2012, International Guarantee Corporation, incorporated in Anguilla.[1]
[1] https://www.justice.gov/sites/default/files/opa/press-releas...
This fits with the description of getting more points. After he got the points, he wanted to keep more of them, so he figured out a way to do that.
Yeah that is 100% lawyer speak haha. Smart move tbqh.
How can a single person with an internet connection (that's my understanding of the 'from his parents home' part) trigger an event that causes US markets to crash and wipe (albeit temporarily) billions of dollars?
I mean, this guy was 'only' in it for the money. Could someone with much worse motives just trigger a crash like this on demand?
I have, at a given timestamp, a queue of orders that must be fulfilled in accordance with a strict set of rules.
By playing the rules and advertising bids with a lowlatency connection fast enough to impact the bid price, whilst canceling and not fulfilling that order, say 250us later. You can make a position to take advantage of that artificial price move that you caused.
This is called spoofing.
But the article says that Sarao did this from his parent's house. Would a residential internet connection be sufficient to perform such spoofing?
The way you describe it, spoofing sounds like an easy way to make money, as long as you have enough capital and a fast internet connection, like with arbitrage. But there must be some limitation to this, right? Could anyone (like me) do spoofing and cause a flash crash?
The idea is you take a previous trading intraday execution data set, profile out volume per second, execution prices, etc. Then encode a proprietary datascience backed decision tree for dispatching buy sell messages.
No human in theol loop.
The futures exchange wrote to Sarao on the day of the flash crash, telling him to stop spoofing, and he called them back "and told em to kiss my ass."
https://www.bloomberg.com/opinion/articles/2015-04-21/guy-tr...
https://www.bloomberg.com/opinion/articles/2020-01-15/it-s-n...
https://www.bloomberg.com/opinion/articles/2020-01-29/goldma...
Oh wait, actually they were "punished" by being bailed out with billions of public dollars.
Well its all fun and games until the next revolution...