CHICAGO, IL – November 9, 2016 – Navinder Singh Sarao pleaded guilty today to one count of spoofing and one count of wire fraud in a U.S. District Court for the Northern District of Illinois, stemming from a case brought by the Commodity Futures Trading Commission (CFTC). Sarao, a resident of London, was arrested by British authorities in April 2015 at the request of the U.S. Department of Justice and extradited to the United States.
The CFTC initially filed a civil enforcement action against Sarao and his company, Nav Sarao Futures Limited PLC, alleging unlawful manipulation and spoofing of the E-mini S&P 500 near month futures contract. The complaint, filed in April 2015, accused Sarao of using a manipulative device to artificially inflate and deflate prices.
As part of a proposed Consent Order submitted jointly by the CFTC and Sarao, the defendant admits to the allegations outlined in the CFTC complaint. The order seeks more than $38 million in monetary sanctions, a permanent ban from trading and registration, and prohibitions against future violations of the Commodity Exchange Act and CFTC Regulations.
Spoofing, a form of market manipulation, involves placing orders with the intent to cancel them before execution, creating a false impression of supply or demand. This practice is illegal and can disrupt market stability.
The CFTC investigation received assistance from the Chicago Mercantile Exchange, the Federal Bureau of Investigation, the U.K. Financial Conduct Authority, the Guernsey Financial Services Commission, and the Metropolitan Police International Assistance Unit, Scotland Yard. The Securities and Exchange Commission also provided cooperation.
Jeff Le Riche, Jo Mettenburg, and several other staff members from the CFTC’s Division of Enforcement led the investigation.
Source: CFTC.gov
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