London, United Kingdom:
An Indian-origin futures trader accused of triggering the Wall Street "flash crash", which wiped billions of dollars off the value of US shares in minutes, is set to be released on bail after spending more than 100 days in prison.
Navinder Sarao (36) could be out of jail soon after Westminster Magistrates Court agreed to cut his bail surety from 5 million pounds to 50,000 pounds.
James Lewis, a barrister representing Sarao, said the 50,000 pound security "had already been handed over to the court".
Under the terms of his bail, Sarao will not be allowed to go beyond London's M25 ring-road and has been barred from using the internet for the purposes of financial trading, which marks a relaxation of a previous condition that meant he could not go online at all.
The US wants to extradite Sarao and a hearing is scheduled for later next month but Sarao plans to fight his extradition and has denied the charges against him.
Sarao has spent more than 100 days in London's Wandsworth prison since being arrested on April 21 by British police acting on a warrant issued on behalf of US prosecutors.
Sarao's lawyers were able to agree a deal with the US authorities whereby more than 25 million pounds of his assets, which they disclosed were held in Switzerland, would be put into a new account, including 2.5 million pounds to cover his legal expenses.
It is alleged that he used a high speed internet connection at his parent's home in south-west London to place a large number of fraudulent electronic orders to sell one type of financial contract.
He is then accused of cancelling the orders, forcing the prices back up again and taking profit from the price swing.
The US Department of Justice (DoJ) believes that Sarao's trades contributed to the flash crash of May 6, 2010, when the Dow Jones stock exchange lost 700 points in a matter of minutes, wiping USD 800 billion of the value of US shares, before recovering again.
US regulators have blamed high-frequency traders placing multiple sell orders for the crash.
High-speed trading is where share dealers use computer algorithms to buy and sell stocks in milliseconds. "By allegedly placing multiple, simultaneous, large-volume sell orders at different price points - a technique known as 'layering' - Sarao created the appearance of substantial supply in the market," a DOJ statement said.
It is alleged Sarao was able to buy and sell futures contracts tied to the value of the share indexes.