London, April 22 (IANS): An Indian-origin financial trader has been arrested and faces extradition to the US on the charges of making $40 million through unethical practices and allegedly causing notorious "flash crash" of 2010.

Navinder Singh Sarao, 37, who played the world's futures markets from a small suburban house in Hounslow, west London, "spoofed" financial markets using commercially available trading software to place $200m of false trades, the US Department of Justice (DoJ) said.

The DoJ was seeking Sarao's extradition, The Guardian reported.

The US department added that Sarao's supposed manipulation contributed to the "flash crash" on May 6, 2010, when the Dow Jones industrial average plunged 600 points in five minutes and created havoc on Wall Street.

Sarao is also accused of duping the market into believing there were a lot more sellers than there really were and profiting from the market movement.

He is said to have changed his orders more than 19,000 times before cancelling them. The episode, although not attributed to him, formed the backdrop for the Robert Harris novel The Fear Index.

A DoJ spokesman would not speculate on how one person, using widely available commercial software, might have been able to crash the world's financial markets.

However, the US regulator, the Commodity Futures Trading Commission, said Sarao and his company had profited by more than $40 million.

The DoJ detailed a series of supposed coups, including episodes where Sarao is said to have made profits of more than $820,000 during a day's trading.