Reuters
Nick Leeson single handedly lost Barings Bank £862 million in 1995.
Sarao was arrested on Tuesday in connection with the "Flash Crash" in 2010. The sudden slump in share prices wiped about 9% off the Dow on May 6, 2010, worth about $1 trillion (£665 billion) in value.
He later had bail set at £5 million ($7.5 million), along with other conditions and will remain in prison until at least today, until he raises the funds. He also faces extradition to the United States, which Leeson thinks is "shocking" and that Sarao is probably "very, very scared."
"The story doesn't entirely ring true to me," he said to LBC this morning. "It looks as though some of the trades he initiated were trigger points that initiated sequences of events that have led markets to fall so, so swiftly.
"We are talking about a young trader that was operating out of his mum and dad's house and he's being charged with effectively forcing around the biggest stock market in the world and going up some of the biggest investment banks. That just doesn't ring true. I hate to jump to conclusions but he seems like a scapegoat. Is there something much more sinister that we don't know?"
Leeson single handedly lost Barings Bank £862 million through rogue trading in 1995. February marked the 20th anniversary since he caused the collapse of Barings Bank.
He fled Singapore with his then-wife Lisa and after he disastrously "lost a lot of money" across a flood of rogue trades. After causing an international manhunt, the bank eventually collapsed three days later as it struggled to recapitalise at such short notice, after Leeson concealed the losses from 1992 to 1995.
He now works as a debt counsellor and now lives with his second wife Leona, in her home town of Galway, Ireland, after his first wife divorced him while he was in jail.