US Govt to use alternative notification procedure for victims of trader Navinder Sarao accused of spoofing

Maria Nikolova

The Illinois Northern District Court has determined that there are multiple victims in this case and alternative procedures for keeping them informed would be appropriate.

Judge Virginia M. Kendall of the Illinois Northern District Court has granted the US Government request for using alternative notification procedure regarding the victims of the crime committed by former futures trader Navinder Singh Sarao who stands accused of spoofing.

Let’s recall that, earlier in June 2019, the Government filed a Motion with the Court asking for authorization to use alternative victim notification procedures – namely, publication on a Department of Justice website – because the large number of possible crime victims in this case makes it impracticable to notify them on an individualized basis. The defendant did not oppose the Government’s motion.

On November 9, 2016, Navinder Singh Sarao pleaded guilty to two counts of a twenty-two count criminal indictment – he pleaded guilty to one count of wire fraud and to one count of spoofing.

From at least approximately January 1, 2009, though at least approximately April 30, 2014, Sarao was a futures trader who traded from proprietary trading companies in London and from his residence in the Hounslow borough of West London, England. During the relevant period and in furtherance of the scheme, the defendant placed thousands of orders to buy or to sell E-Mini S&P 500 futures contracts traded on the Chicago Mercantile Exchange that he intended, at the time he placed the orders, to cancel before execution. The defendant’s sentencing in this case is currently set for September 26, 2019.

The Government believes that the spoof orders placed by Sarao may have affected thousands of counterparties and other market participants that traded E-Mini S&P 500 futures contracts while the spoof orders were pending in the market.

As an alternative procedure to notify possible crime victims in this case, the US authorities propose the setting up of a public Department of Justice website at https://www.justice.gov/criminal-vns/case/Navinder-Sarao. The website would provide a summary of the case, information regarding the case’s status and sentencing date, and other significant case-related documents, such as the charging documents and plea agreement. The website also would contain an e-mail address and telephone number for a Victim Assistance Line through which individual possible crime victims could contact the Department of Justice regarding the case.

In her order, issued earlier this week, the Judge agreed that the “multiple crime victims” provision applies in this case and that the procedure proposed by the Government is reasonable.

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