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{{short description|U.S. stock market crash lasting 36 minutes in May 6, 2010}}
{{Use American English|date=June 2023}}
{{Use mdy dates|date=May 2018}}
[[File:Flashcrash-2010.png|thumb|The [[Dow Jones Industrial Average|DJIA]] on May 6, 2010 (11:00 AM – 4:00 PM EDT)]]
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New regulations put in place following the 2010 flash crash<ref name="wsj_dec_2015">{{cite web | url=https://www.wsj.com/articles/should-you-fear-the-etf-1449457201 | title=Should You Fear the ETF? ETFs are scaring regulators and investors: Here are the dangers—real and perceived | publisher=Wall Street Journal | date=December 6, 2015 | access-date=December 7, 2015 | author=Weinberg, Ari I.}}</ref> proved to be inadequate to protect investors in the August 24, 2015, flash crash — "when the price of many ETFs appeared to come unhinged from their underlying value"<ref name="wsj_dec_2015" /> — and ETFs were subsequently put under greater scrutiny by regulators and investors.<ref name="wsj_dec_2015" />
On April 21, 2015, nearly five years after the incident, the U.S. Department of Justice laid "22 criminal counts, including fraud and market manipulation"<ref name="Bloomberg_2015" /> against Navinder Singh Sarao, a [[British Indian]] financial trader. Among the charges included was the use of [[Spoofing (finance)|spoofing]] algorithms; just prior to the flash crash, he placed orders for thousands of [[E-Mini S&P|E-mini S&P 500 stock index futures contracts]] which he planned on
The [[Commodity Futures Trading Commission]] (CFTC) investigation concluded that Sarao "was at least significantly responsible for the order imbalances" in the derivatives market which affected stock markets and exacerbated the flash crash.<ref name="Bloomberg_2015">{{citation |work=Bloomberg News |title=How a Mystery Trader with an Algorithm May Have Caused the Flash Crash |url=https://www.bloomberg.com/news/articles/2015-04-22/mystery-trader-armed-with-algorithms-rewrites-flash-crash-story |access-date=April 25, 2015 |first1=Silla |last1=Brush |first2=Tom |last2= Schoenberg |first3=Suzi |last3=Ring |date=April 22, 2015}}</ref> Sarao began his alleged market manipulation in 2009 with commercially available trading software whose code he modified "so he could rapidly place and cancel orders automatically".<ref name="Bloomberg_2015" /> ''Traders Magazine'' journalist, John Bates, argued that blaming a 36-year-old small-time trader who worked from his parents' modest stucco house in suburban west London<ref name="Bloomberg_2015" /> for sparking a trillion-dollar stock market crash is "a little bit like blaming lightning for starting a fire" and that the investigation was lengthened because regulators used "bicycles to try and catch Ferraris". Furthermore, he concluded that by April 2015, traders can still manipulate and impact markets in spite of regulators and banks' new, improved monitoring of automated trade systems.<ref name="Traders_Magazine_2015">{{citation |title=Post Flash Crash, Regulators Still Use Bicycles To Catch Ferraris: Blaming the Flash Crash on a UK man who lives with his parents is like blaming lightning for starting a fire |work=Traders Magazine Online News |date=April 24, 2015 |access-date=April 25, 2014 |first=John |last=Bates |url=http://www.tradersmagazine.com/news/technology/post-flash-crash-regulators-still-use-bicycles-to-catch-ferraris-113762-1.html?ET=tradersmagazine%3Ae4256762%3A1181926a%3A&st=email |archive-url=https://web.archive.org/web/20180125134559/http://www.tradersmagazine.com/news/technology/post-flash-crash-regulators-still-use-bicycles-to-catch-ferraris-113762-1.html?ET=tradersmagazine%3Ae4256762%3A1181926a%3A&st=email |archive-date=January 25, 2018 |url-status=dead }}</ref>
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===Evidence of market manipulation and arrest===<!-- [[Navinder Singh Sarao]] redirects here -->
In April 2015, Navinder Singh Sarao, an [[autistic]]<ref>{{Cite news|url=https://www.thetimes.co.uk/article/navinder-singh-sarao-the-flash-crash-trader-who-fell-foul-of-washington-3vl5vvcbj|title = Navinder Singh Sarao: The 'flash crash' trader who fell foul of Washington|last1 = Vaughan|first1 = Liam}}</ref><ref>{{Cite web|url=https://abcnews.go.com/US/wireStory/autistic-futures-trader-triggered-crash-spared-prison-68599310|title = Autistic futures trader who triggered crash spared prison|website = [[ABC News]]}}</ref> London-based point-and-click trader,<ref>{{cite news |title=The trader blamed for the 'flash crash' tried to blow the whistle on other traders|date=May 15, 2015|access-date=Dec 30, 2015|publisher=[[Business Insider Australia]]|url=http://www.businessinsider.com.au/navinder-singh-sarao-blew-the-whistle-on-other-traders-2015-5}}</ref> was arrested for his alleged role in the flash crash. According to criminal charges brought by the [[United States Department of Justice]], Sarao allegedly used an automated program to generate large sell orders, pushing down prices, which he then
*{{cite news | url=https://www.nytimes.com/2015/08/15/business/dealbook/bail-reduced-for-british-trader-charged-in-flash-crash.html | title=British Trader Charged in 'Flash Crash' Released After Bail Reduction | publisher=DealBook | date=August 14, 2015 | access-date=August 17, 2015 | author=Bray, Chad}}
*{{cite web |last1=Lynch |first1=Sarah N. |last2=Polansek |first2=Tom |last3=Miedema |first3=Douwe |title=Documents show flash crash trader's frenetic business dealings |url=https://www.reuters.com/article/us-flashcrash-trader-rjobrien/documents-show-flash-crash-traders-frenetic-business-dealings-idUSKBN0NE27820150424?feedType=RSS&feedName=topNews |publisher=Reuters |date=April 23, 2015}}
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