On May 6, 2010, the Dow fell nearly a thousand points and a trillion dollars in market value disappeared in 36 minutes. Five years later, authorities pointed to Navinder Singh Sarao, a 36 year old trading in sweatpants from his parents’ stucco house in West London. This episode explains how he got there: Regulation NMS linked the exchanges, high frequency firms exploited the milliseconds between them, and Sarao learned to fool their algorithms with huge sell orders he never meant to fill.

The story also asks whether he was a culprit or a scapegoat. That afternoon a mutual fund identified as Waddell and Reed was selling 4.1 billion dollars of E-mini contracts into a market already rattled by fears of a Greek default, and the high frequency machines shut themselves off like robot vacuums at the top of a staircase. Then comes the twist: the man who outwitted supercomputers handed his fortune to con men selling fake wind farms, and walked away with no prison time.

• Sarao’s modified off the shelf software placed about 200 million dollars in fake sell orders and changed them 19,000 times before canceling.
• With liquidity gone, Accenture and Procter and Gamble briefly traded at a penny a share while Apple and Sotheby’s spiked above 100,000 dollars.
• Academics blamed order flow toxicity, arguing the market was already poisoned an hour before the crash.
• Arrested in April 2015 on 22 criminal counts, Sarao was said to have made more than 40 million dollars between 2009 and 2015. By 2017 his lawyers reported the money was gone.
• In January 2020 a judge sentenced him to one year of home confinement, citing his cooperation, his Asperger’s diagnosis, and the absence of ordinary greed.