LONDON (Reuters) - A London-based trader, accused by the U.S. of contributing to the 2010 Wall Street "flash crash", should not be extradited because the offences he is accused of are not crimes in Britain, his lawyers said on Friday.
Navinder Sarao also had only a "gossamer thin" link to the 2010 market plunge, his lawyer Joel Smith told London's Westminster Magistrates Court.
"Anybody who knows anything seems to be saying (it's) nothing to do with Mr Sarao," Smith said.
Sarao, 37, who traded on the Chicago Mercantile Exchange from his parents' home near London's Heathrow Airport, is wanted in the United States to face trial on 22 criminal counts including wire fraud, commodities fraud and attempted price manipulation. He denies any wrongdoing.
U.S. authorities say he is guilty of "spoofing" by placing large orders which manipulated the markets and then cancelled or modified them, allowing him to buy or sell at a profit.
His actions, they say, helped played a role in events which caused the flash crash on May 6, 2010 when the Dow Jones Industrial Average briefly fell more than 1,000 points, temporarily wiping out nearly $1 trillion in market value.
His spoofing netted him a profit of $40 million, they argue.
Mark Summers, the lawyer representing the United States, said the CME had been "bubbling hot" on the day of the crash and had then boiled over.
"Mr Sarao was one of the significant heat sources," he said.
However, Sarao's extradition does not hinge on his guilt or otherwise but on technical legal issues.
"The key question for this court is whether the conduct of Mr Sarao amounts to a crime in the UK," James Lewis, another of his lawyers, said. "Quite simply it does not. There's no English crime of spoofing."
The crux of the defence case is that Sarao placed genuine orders which exposed him to risk if they were executed.
The court heard on Thursday from Professor Lawrence Harris, a former U.S. Securities and Exchange Commission chief economist, who said traders placed and cancelled millions of orders every day.
Lewis told the court 99 percent of all orders were cancelled and that thousands of traders in England would be guilty of criminal activity if that behaviour alone were considered illegal.
The hearing concludes later on Friday and the judge is expected to reserve his ruling until a later date.
70.35p close today might turn out to be significant. Even without any boost from an analyst site visit CEY's case is more and more compelling.
Today was the first close >70p since 23/10/15 and until today there have only been 3 closes above 70p in the last 18 months. The CEY 4 year rising low Price and narrowing of the trading range is a strong indicator of latent accumulation : dips are bought and more and more holders are becoming strong holders. Over 50% of the issued share capital is now held by institutions and management.
The case for having some PM's or quality miners in your portfolio is finally getting some traction after 4 years of being largely shunned in favour of sexy stocks that only go up...like Tesla, Go pro, Apple, Twitter etc. After January's reality check many 'new investors' have experienced a decline in EPS and scary daily volatility for the first time. They don't know whether to bail out or catch a falling knife.
Suddenly CEY and other quality miners are being looked at again as a safe haven and as one of the few sectors which are at a cycle low and likely to prosper if the US and the world tumbles into a full on recession.
Daily indicators keep coming out which are alarming : the Baltic Dry Index hit new record low yesterday of 310; US truck sales in January are down 48%. And with markets rolling over Ponzi schemes always emerge from the swamp - remember Enron, Madoff ? A Chinese P2P lender collapsed on Monday defrauding 900,000 investors of $7.2bn. Unfortunately this is likely the first and not the last of such collapses which will play out in the coming months.
Here we stand in our gold flip flops waiting patiently for our micro issues with CEY to be resolved and thereby release the price upwards. But macro economics may do it for us :
NY Fed's Dudley yesterday (No2 to Yellen) hinted at policy error. A Int. rate reversal would be good for gold and CEY.
Confidence in the Fed and Central Banks is diminishing. The dollar fell by most in 7 years yesterday. Good for gold and CEY.
Turkey might invade Syria. Or start a real war with Russia. Good for gold and CEY.
China might devalue by 30% and declare it's intention to back or partially back the Yuan with gold. The game changer for gold and CEY.
The gold bank cartel may smack paper Comex gold tomorrow as it is customary on US non farm payrolls day but gold usually rallies strongly after NFP day. Perhaps just for once tomorrow will be another data point of the worm turning if gold doesn't get wacked,or if it is but closes up anyway.
Bottom line whether long time holder our new investor your patience with CEY will be well rewarded and it could all happen very quickly now.
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