BUSINESS

'Flash Crash' Trader Charged With Manipulation, Wire Fraud

(FILES) File photograph dated May 6, 2010 shows traders on the floor of the New York Stock Exchange looking at stocks during
(FILES) File photograph dated May 6, 2010 shows traders on the floor of the New York Stock Exchange looking at stocks during the final minutes of trading as the Dow Jones lost almost 1,000 points before recovering to a loss of 505. The Wall Street 'flash crash' on May 6 that saw the Dow Jones index dive 700 points within minutes was sparked by a single 4.1-billion-dollar computer trade, US watchdogs said October 1, 2010. The historic crash was prompted by one firm's algorithm selling off 75,000 stocks in 20 minutes, according to a joint report by the Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission (CFTC). Amid tense market conditions the sale started a cascade of automated sales, the report said. AFP PHOTO/TIMOTHY A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)

LONDON — A futures trader was arrested in Britain over allegations that his manipulation of trades helped prompt the May 2010 “flash crash,” when the Dow Jones industrial average plummeted 600 points and unnerved many investors, even though stocks quickly recovered their losses.

The trader, Navinder Singh Sarao, 37, was arrested Tuesday morning at his home in London on charges of wire fraud, commodities fraud and manipulation charges, prosecutors in the United States said during a news conference.

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