A high-frequency trader was arrested in the United Kingdom over his alleged role in the May 2010 ‘flash crash’ that briefly wiped out nearly $1 trillion in market capitalisation, the first time authorities have blamed manipulation for the market turbulence.

Navinder Singh Sarao, 36, of Hounslow, a suburb of London, was criminally charged with wire fraud, commodities fraud and manipulation, the US Justice Department said on Tuesday. Sarao allegedly used an automated program to generate large sell orders that pushed down prices. He then cancelled those trades and bought the contracts at the lower prices to benefit when the market recovered, authorities said.

“His conduct was at least significantly responsible for the order imbalance that in turn was one of the conditions that led to the flash crash,” said Aitan Goelman, head of enforcement at the Commodity Futures Trading Commission, which filed parallel civil charges against Sarao on Tuesday.

The case marks the first time US regulators have alleged that market manipulation played a role in the flash crash, in which the Dow Jones Industrial Average plunged more than 1,000 points before recovering somewhat toward the end of trading. Prosecutors said the Chicago Mercantile Exchange’s self-regulatory staffers caught wind of some of Sarao’s suspicious trades as early as 2009. He reaped some $40 million between 2010 and 2014 trading the futures contracts known as ‘E-minis’,” according to the DOJ complaint.

An October 2010 report by the CFTC and Securities and Exchange Commission found that one of the contributing factors in the flash crash was a computer-driven trade by a mutual fund which chose to sell a large number of E-mini S&P 500 futures contracts. It did not mention market manipulation.

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