Sarao v The Government of the United States of America

For dual criminality, the relevant question is whether the conduct described in the extradition request would constitute an offence in the United Kingdom if it occurred here. Placing an offer without genuinely intending it to be accepted may amount to a deceptive representation and market manipulation, even though ordinary offers may later be cancelled. The extradition court does not determine guilt or resolve contested expert evidence. The forum bar asks whether extradition would not be in the interests of justice, not which forum is more convenient. Where the statutory exercise has been materially mishandled, the appellate court may conduct it afresh. A court may uphold the overall conclusion despite correcting an error concerning one statutory factor.

The applicant renewed his application for permission to appeal against a District Judge’s decision sending the case to the Secretary of State for consideration of extradition to the United States. The Secretary of State subsequently ordered extradition, but that decision was not challenged.

The extradition request concerned allegations of wire fraud, commodities fraud, commodities manipulation and spoofing in relation to trading on the Chicago Mercantile Exchange. The applicant relied on dual criminality, abuse of process and the forum bar under the Extradition Act 2003. The court considered whether the alleged conduct, if carried out in the United Kingdom, would constitute relevant domestic offences; whether the request was unfairly presented; and whether extradition would not be in the interests of justice.

1. Permission to appeal refused. The applicant had no reasonable prospect of success on any ground. The court was concerned with the extradition decision, not the applicant’s guilt or innocence.
2. For dual criminality, the court distinguished between placing an offer genuinely intended to remain open for acceptance, although later cancelled, and placing an offer which the offeror did not genuinely intend should be accepted. The latter conduct was alleged to deceive market participants by creating a false market picture and artificial price movements. If proved in the United Kingdom, it would constitute offences under section 2 of the Fraud Act 2006, section 397 of the Financial Services and Markets Act 2000 and section 90 of the Financial Services Act 2012. The request need not use the precise terminology of English law.
3. The fact that some offers might have been accepted before cancellation, and that many traders commonly cancel offers, did not answer the allegation of dishonest placement without genuine intention of acceptance. The court had to examine the conduct set out in the request. Expert evidence relevant to guilt was for a future trial.
4. The abuse of process ground failed. The request distinguished lawful cancellation or modification from spoofing by reference to intent and market context, and therefore was not shown to present an unfair or materially inaccurate account.
5. The threshold for the forum bar under section 83A(2)(a) was satisfied because a substantial measure of the relevant activity occurred in the United Kingdom. However, the District Judge had erred in treating section 83A(3)(f) as favouring trial in the United States; that factor was neutral. The appellate court nevertheless re-performed the statutory exercise. The principal consideration was that most loss or harm, including harm to United States-based counterparties and damage to the integrity of a United States market, occurred or was intended to occur in the United States. That consideration overwhelmingly outweighed the applicant’s United Kingdom connections. Readiness for trial in the United States provided additional, but minor, support.
6. The overall value judgment was therefore unimpeachable, and extradition was not shown to be contrary to the interests of justice.

1. High Court (Administrative Court): District Judge Purdy decided on 23 March 2016 to send the case to the Secretary of State for extradition to be considered. The applicant renewed his application for permission to appeal.
2. High Court (Administrative Court): Irwin J refused permission on the papers. The present court refused permission to appeal and gave reasons for that decision.
3. Secretary of State: An extradition order was made on 14 May 2016. That decision was not challenged in these proceedings.