Software developer accused of spoofing seeks to nix “ostrich” jury instruction

Maria Nikolova

Jitesh Thakkar opposes the theory that he deliberately avoided learning that London-based trader Navinder Sarao would use Edge Financial’s program to spoof.

As the start of the trial against Jitesh Thakkar, the founder and principal of Edge Financial Technologies Inc., gets closer, the legal battle concerning evidence and jury instructions intensifies. Jitesh Thakkar is charged with spoofing and conspiracy to commit spoofing for trades made by London-based trader Navinder Sarao using Thakkar’s company software.

On Sunday, March 24, 2019, the defense counsel for Thakkar filed a motion with the Illinois Northern District Court, asking the Court to reject a proposed jury instruction by the US Government.

Jitesh Thakkar moves the Court to bar the government from offering the “ostrich” jury instruction at trial.

What’s an ostrich theory? The concept comes from behavioral finance. The ostrich effect is the attempt made by investors to avoid negative financial information. The name comes from the false legend that ostriches hide their heads in the sand to avoid danger.

Thakkar’s defense is now displeased with the US Government’s efforts to present their client as someone who avoided the information that his company’s software would be used to spoof.

In the motion filed on Sunday, the defense says the government changed its entire theory of the case and notified the defense of its intent to seek this instruction on Friday at 8:05 p.m. – just six days before jury selection was set to begin.

The defense stresses that during his interviews with the FBI in 2017, Jitesh Thakkar consistently explained to the government that he did not know how Sarao would use the computer program Edge Financial created and that traders do not reveal their trading strategies to programmers because those strategies are secret. The government disregarded these statements and presented a theory of the case that Jitesh had actual knowledge that Sarao would use the computer program to spoof.

Now, days before trial, the government seeks to present an entirely different theory in this case – that Jitesh deliberately avoided learning that Sarao would use the program to spoof.

The defense argues that allowing the government to present this new ostrich theory to the jury even though the defendant does not have time to retain and prepare witnesses on the proprietary and secret nature of trading strategies would present a misleading picture to the jury and deprive Jitesh Thakkar of his right to a fair trial.

Under these circumstances, the government’s proposed ostrich instruction must be rejected, the defense says.

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