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'Flash crash' trader: What next? Advice for Sarao

A woman walks past the New York Stock Exchange on May 6, 2010, the day of the "Flash Crash."
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A woman walks past the New York Stock Exchange on May 6, 2010, the day of the "Flash Crash."

The trader whom U.S. prosecutors have blamed partly for the 2010 "flash crash" has been advised to cut a deal soon by a U.K. banker involved in an earlier extradition battle.

David Bermingham, who battled extradition to the U.S. for years in a case linked to the Enron scandal, told CNBC that Navinder Singh Sarao should try to reach a plea deal from the U.K., whether he is guilty or not. Sarao faces U.S. charges of wire fraud, commodities fraud and manipulation and "spoofing."

"Once he's extradited, he's going to be locked up in some very nasty place until he agrees to sign a piece of paper agreeing he's done something wrong," Bermingham told CNBC.

Read More'Flash crash' trader granted conditional bail by UK court

"He needs to hire some U.S. lawyers now and try to come to an agreement from London," said Bermingham, who pleaded guilty to one count of wire fraud in 2007 and is one of the British businessmen known as the NatWest Three.

The charges Sarao face could send him to prison for decades if he is convicted.

Bermingham said once Sarao is viewed as a fugitive, he will face greater penalties.

Sarao said Wednesday he does not consent to U.S. extradition. His lawyer had not responded to a request for comment, and a family member declined to comment when contacted by CNBC.

A full extradition hearing is scheduled for August.

Read MoreWhat caused the flash crash? CFTC, DOJ weigh in

Sarao's extradition battle is unlikely to last much longer than the later hearing, as there is no longer an automatic right of appeal in such cases.

Lawyers for the prosecution claim Sarao could have made up to $40 million over four years.

"In financial crime, one of the biggest single determinants is the loss. The bigger a figure the prosecutor can put on it, the bigger the sentence," Bermingham said.