Navinder Singh Sarao will never rank among the most notorious inmates of HM Prison Wandsworth.
William Joyce betrayed Britain to the Nazis. Ronnie Kray ruled the ganglands of the East End. Bruce Reynolds masterminded the Great Train Robbery.
Today Nav Sarao sits in a 10-foot-by-six-foot cell at Wandsworth, considered one of the worst prisons in Britain, accused of an altogether different sort of crime: helping to wipe more than $1 trillion off financial markets five years ago. At “Wanno,” a forbidding Dickensian fortress south of the River Thames, time moves to the same monotonous rhythm: the jangle of guards’ keys at 6:30 a.m.; yard exercise at 8 a.m.; dinner at 4:30 p.m.; lockdown by 8 p.m.
Sarao was arrested at his parents’ modest, suburban home that Tuesday and accused of helping to cause the so-called flash crash of 2010, when the U.S. stock market plunged in a matter of minutes. While prices recovered almost as quickly as they’d fallen, the episode staggered investors. No one could explain it. Here at last, authorities claimed, was an answer: a glorified day trader living with his mom and dad near Heathrow Airport.
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This Tuesday, Sarao will return to court in his gray prison tracksuit and sit in the glass-fronted dock for an eighth time. The U.S. is seeking to extradite him on 22 counts ranging from wire fraud to market manipulation.
“I’ve not done anything wrong apart from being good at my job,” Sarao exclaimed in court in May, the only time he has spoken publicly since his arrest.
For all the question marks surrounding this case, the biggest of all has been Sarao himself. To Fleet Street, he is the “The Hound of Hounslow,” a tabloid caricature of City greed and excess.
A London lawyer for Sarao declined to comment. A spokesman for Wandsworth prison contested its description as one of the worst jails and said it had been praised for its performance.
Sarao’s devious trading netted many millions, authorities allege, but colleagues say he was almost pathologically frugal. He worked largely in line with U.S. markets, which enabled him to commute across London between rush hours to get cheap off-peak fares. He would buy sandwiches after the lunch crush to save 50 pence. Asked by a colleague why he didn’t treat himself to a Bugatti, Sarao said he didn’t know how to drive.
Sarao, 36, denies all the charges, and many observers doubt he, or anyone else, caused the flash crash single-handedly
Neighbors in the Sikh community where Sarao grew up remember him as nothing special, if they remember him at all. His older brothers followed safe, predictable paths: one became an optician, the other an IT specialist.
Sarao reached for more. Each morning he would awaken in the stucco home where he grew up. His mother would drive him to the train in her old, green Vauxhall Corsa, beyond the sari shops and temples of the neighborhood’s Little India.
Fifteen miles east, he would step off in the City and into his other life. Beyond St. Paul’s, toward Tower Bridge, he would stroll along Minories street to St. Clare House, take the lift to the fifth floor and drape his leather jacket over the back of his chair. Then he would put on noise-reduction headphones and set to work.
Here at last people noticed him. Everyone at CFT Financials Ltd. had heard about Nav, as they had at Futex Ltd., the small trading firm where he started out. Over time, his ambition curdled toward obsession, even paranoia. He became convinced that his orders were somehow being leaked. But to the mostly male, mostly young screen jockeys trying to scratch out a living in the markets, Sarao was a legend.
“This guy, for want of a better word, had balls,” Miltos Savvidis, a trader at Futex, later recounted to prospective employees. “He used to get into big positions, he saw the risk, he saw the reward, and he took the trades.”
Sarao arrived at Futex as a graduate trainee in 2003 after studying computer science atBrunel University, not far from his home in Hounslow. Futex spots trainees as much as 1 million euros ($1.2 million) in return for a cut of profits and, before long, Sarao was the talk of the trading floor.
While the other traders were eking out 500 pounds ($765) a week, he was clearing 500,000 pounds. He sat by himself, away from the rest. At the end of the day, his colleagues would try to sneak a look at a computer log of everyone’s profits and losses. Sarao was almost always at the top.