Disrupting the world — from a small bedroom in Hounslow

On 6 May 2010 the eurozone crisis was tearing through the continent. Greece was bankrupt, and it looked as though Spain or Italy could be next. Markets were on edge, volatility was high — and then something very strange happened.

The S&P 500, one of the US’s main stock indexes, began to crash. It went faster and further than it ever had before, losing 5 per cent of its value in four minutes. The shock spread to the Dow Jones, which hurtled downwards. Financial markets across the globe were going haywire. The oil price started to fall. Shares formerly valued at $50 were suddenly trading at 0.0001 cents while others soared. In little more than 20 minutes, trillions of dollars had been wiped off the value of global markets. But then, quite suddenly, normality returned and prices went back to normal. It came to be known as ‘the Flash Crash’. But what had happened? Who was responsible?

The culprit wasn’t a hedge fund manager or Wall Street CEO. Navinder Sarao couldn’t have been further from the world of high finance if he’d tried. Nav, as his friends called him, had no office in Mayfair. Instead, he traded from his bedroom at his parents’ house in Hounslow. The officer who eventually arrested him described the room as ‘musty and unkempt’. There was a single bed, a labrador-sized stuffed tiger and on the wall a framed pair of football boots, signed ‘To Nav, from Lionel Messi’. At the end of the bed was the scene of the crime: ‘a desktop with three screens connected to a standard broadband line. And that was it.’ As far as the authorities were concerned, Nav had caused the Flash Crash and he’d done it all from his bedroom.