Rogue Trador Admits $1bn Apple Fraud

Rogue Trader Admits $1bn Apple Fraud


David Miller bought $1bn in Apple stock without permission,
which caused a $5.4m loss and brought down his company.


9:49am UK,
Tuesday 16 April 2013

The gamble left his company $5m down when Apple's share
price dropped

• 
  
  
  
  
  A securities trader has pleaded guilty to fraud after he bought
  $1bn (£650m) of Apple stock without permission and brought down his company.
  
  David Miller's rogue trade caused the demise of Rochdale Securities after he
  bought 1.625million shares on the day Apple reported third-quarter results in
  October 2012.
  
  Prosecutors said Miller had hoped to profit from a rise in Apple's share
  price - but the gamble backfired.
  
  It is claimed the 40-year-old made the trade on behalf of one of Rochdale's
  clients who had in fact only ordered 1,625 shares.
  
  They allege Miller conspired with another person to reap the profit if the
  share price went up or claim "human error" if the price dropped.
  
  When the share price fell, Miller claimed he had made a mistake in purchasing
  a thousand times too much stock.
  
  Rochdale ended up holding 1.6million shares it did not want and taking a
  $5.4m (£3.5m) loss, pushing its assets below the legal limit for a
  brokerage.
  
  The US Securities and Exchange Commission called the scheme "deliberate,
  brazen and ultimately ill-conceived".
  
  "(It) caused catastrophic losses for his former employer and was unravelled
  promptly by the FBI," said attorney David Fein.
  
  Miller faces 25 years in prison when he is sentenced on July 8, but could get
  just five to eight years under a plea deal.
  
  His attorney said he regrets what he did and the harm it caused.
  
  "Those who know David know that what happened here was out of character for a
  kind and generous family man who has lived an otherwise law abiding and good
  life," said Kenneth C. Murphy.
  
  "When the time comes he will accept his punishment and he will spend the rest
  of his life trying to make up for the wrong he committed."
  
  Rochdale Securities is not a defendant in either case and is not accused of
  any wrongdoing.