US federal grand jury indicts 'flash crash' trader

Chris Ratcliffe | Bloomberg | Getty Images

Navinder Singh Sarao, a British trader charged over his role in the 2010 U.S. flash crash, leaves Westminster Magistrates' Court after losing a bid to delay extradition proceedings in London, U.K., on Friday, Aug. 28, 2015. Sarao asked a London judge for more time to prepare an expert report on trading, but the judge rejected the request, saying the issue was irrelevant to the question of extradition.

London day trader Navinder Sarao has been formally indicted by a U.S. federal grand jury on charges of market manipulation that prosecutors say helped contribute to the 2010 "flash crash," according to a Sept. 2 court filing made public on Thursday.

The Justice Department first announced criminal charges against Sarao in April and is seeking to have him extradited to the United States to stand trial.

Sarao is accused of using an automated trading program to "spoof" markets by generating large sell orders that pushed down prices. He then canceled those trades and bought contracts at lower prices, prosecutors say.

Attorneys for Sarao could not be immediately reached outside of London business hours.

The indictment made public Thursday contained the same criminal charges announced in the spring, which include wire fraud, commodities fraud, commodity price manipulation and attempted price manipulation.

But it revealed new details about how prosecutors say Sarao sought out the help of computer programmers to design a manipulative automated trading program.

Read MoreUK trader charged for manipulation contributing to 2010 flash crash

It quotes from several emails Sarao sent to programmers in which he explicitly references spoofing behavior.

In a February 2009 email, for instance, the indictment says Sarao told a programmer: "If I am short I want to spoof it (the market) down, so I will place offer orders ... at the 1st offer and 2nd offer and an order ... into the 1st bid. These will not be seen."

In August, Sarao was freed on bail from a British jail. He was granted bail in April shortly after his arrest, but was not able to pay it because U.S. authorities had frozen his assets.

He is also facing parallel civil charges by the U.S. Commodity Futures Trading Commission.