A London-based trader on Wednesday became the second person convicted of criminally spoofing U.S. futures markets, after he pleaded guilty to federal charges that he contributed to Wall Street’s 2010 “flash crash” by using the manipulative trading practice.

Navinder Sarao, 37, who traded on the Chicago Mercantile Exchange from his parents’ home near London’s Heathrow Airport, pleaded guilty to one count each of spoofing and wire fraud as part of an agreement with U.S. prosecutors.

Separately, the U.S. Commodity Futures Trading Commission said it was seeking more than $38 million in monetary sanctions from Sarao and a permanent trading ban against him as part of the deal.

Wearing an orange penal jumpsuit during his first appearance in a U.S. court, Sarao acknowledged that he would pay the U.S. government $12.9 million he earned in profits from illegal trading. He told U.S. District Court Judge Virginia Kendall that he understood the terms of the plea deal.

Kendall said sentencing guidelines call for him to be jailed for 78 to 97 months. The maximum possible jail term for the crimes is 30 years.

 

Prosecutors alleged that Sarao used a modified computer program to “spoof” E-mini S&P 500 futures by generating large sell orders that pushed down prices. He then canceled the trades and bought the contracts at the lower prices, they said.

Prosecutors said his actions contributed to market instability that led to the flash crash on May 6, 2010, when the Dow Jones industrial average briefly plunged more than 1,000 points, temporarily wiping out nearly $1 trillion in market value.

“Sarao abused sophisticated technology to make a quick profit, and jeopardized the integrity of U.S. financial markets,” said Assistant U.S. Attorney General Leslie Caldwell.

“By flooding the marketplace with bogus orders, his scheme victimized countless individuals.”

The case is the government’s second conviction of a futures trader charged with criminal spoofing, after an anti-spoofing provision was added to the Commodity Exchange Act by the 2010 Dodd-Frank financial reform, said Renato Mariotti, a former U.S. prosecutor in Chicago.

“The government has shown once again that they can bring criminal charges in a spoofing case and obtain a conviction,” said Mariotti, now a partner at law firm Thompson Coburn. “It’s a message to everyone in the industry.”

Last year, Mariotti prosecuted commodities trader Michael Coscia, who became the first person convicted under the provision after a jury found him guilty.

Pending his sentencing, Sarao will be released on a $750,000 bond and be allowed to return to the UK. His family members offered their homes to secure his release, and Kendall placed overseas calls to them in open court to confirm they understood the terms of the agreement.

Sarao “doesn’t take any sort of intoxicant at all,” his dad told the judge over the phone, when she said Sarao was not allowed to get drunk.

“He doesn’t even drink tea or coffee,” the father said.

Sarao suffers from a severe form of Asperger’s syndrome, which is related to autism, according to his lawyer Roger Burlingame of the firm Kobre and Kim.

He said Sarao has “some extraordinary abilities,” such as recognizing patterns, adding he also has “severe social limitations.”

Sarao’s attorneys are working with the U.S. Commodity Futures Trading Commission to obtain funds to pay the government, Burlingame said. However, Sarao lost some money in a Ponzi scheme, he said.

Prosecutors said the trader would be better able to help them recover money from his home rather than if he were confined in jail before being sentenced next year.

The case is U.S. v. Sarao, U.S. District Court, Northern District of Illinois, No. 15-cr-00075.