Navinder Singh Sarao: Criminal Mastermind or Sacrificial Lamb?

25 Pages Posted: 30 Apr 2015 Last revised: 8 May 2015

See all articles by Asad Ali Khan

Asad Ali Khan

Advocate High Court Pakistan - Barrister-at-Law (Middle Temple)

Date Written: April 28, 2015


A double standard is exposed by Mr Sarao’s selective prosecution. Bankers, who have been dubbed the “masters of the universe” by the Parliamentary Commission on Banking Standards (PCBS) for their extreme recklessness, remain above the law and are not being prosecuted notwithstanding the gravity of their misconduct. Instead, bank misconduct is increasingly being settled by way of record-breaking fines. Viewed in juxtaposition, this differential treatment raises questions about whether the criminal law still plays any real part in proceedings against international banks or whether it is effectively a dead letter? The hierarchy of culpability devised by Roger McCormick in Seven Deadly Sins: ‘Retrospectivity, Culpability and Responsibility’ has been turned on its head in practice and it is an oddity that Case 5: “Individual Criminality” has come to trump Case 1: “Clustered Criminality”. Analysed against the fact that benchmark rigging traders in Deutsche Bank escaped prosecution because of the bank’s ability to pay a record breaking fine of £1.7 billion, Sarao’s case makes a striking comparison because he does not have the option of paying his way out of trouble and finds himself charged in criminal proceedings that have a punishment totalling 380 years’ imprisonment. On proper analysis, if anything, recent events (21 April 2015-27 April 2015) demonstrate an inversion of the meticulous hierarchy developed in Seven Deadly Sins. They also debunk the “maxim” that “it’s not our fault, we didn’t know” because employees in Deutsche Bank were quite well aware of the nature and quality of their deliberate benchmark manipulation. Deutsche Bank has been the focus of recent regulatory action and from 2009 to 2015 it has been fined £7.32 billion for misconduct (or what the National Health Service (NHS) needs to survive by 2020). This paper contextualises Sarao’s circumstances, analyses the culture of trading, critically evaluates the latest round of international fines and concludes that the hierarchy of culpability in relation to corporate misconduct has been inverted in practice. Readers should note that Professor McCormick does not necessarily endorse my reading of his theory, but I have nonetheless taken the liberty to use it as a didactic device to advance my own freewheeling analysis in which I propose a dynamic interpretation of Professor McCormick’s work because of the important public issues at stake.

Keywords: Banks, Benchmarks, Conduct Costs, CME, CFTC, CPS, DoJ, Deutsche Bank, DJIA, Extradition, E-mini S&P 500, EURIBOR, FBI, FCA, Financial Crisis, Flash Crash, Fraud, IAU, LIBOR, Markets, Manipulation, NYDFS, PPI, PCBS, Sarao, Spoofing

Suggested Citation

Khan, Asad A, Navinder Singh Sarao: Criminal Mastermind or Sacrificial Lamb? (April 28, 2015). Available at SSRN: or

Asad A Khan (Contact Author)

Advocate High Court Pakistan - Barrister-at-Law (Middle Temple) ( email )


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