MacNN | Rochdale trader arrested, charged in $1B AAPL fraud scheme
Mac News Network View: Standard | Headlines | Categorized | Slim
Mac News Network
Mac News iPod News Reviews Forums
 

Desktop Headlines
Rochdale trader arrested, charged in $1B AAPL fraud scheme
Wednesday, December 5, 2012 @ 4:00am

A now-fired broker at Rochdale Securities tried to quickly cash in on a stock windfall generated by Apple's earning announcements, but ended up costing his employer millions and has been arrested and charged with fraud. David Miller's scheme was roiled when AAPL fell instead of rose on the company's record-breaking quarter, due to a slip in expected iPad growth. It is charged that he improperly bought 1,000 times the number of shares requested by a customer, planning to dump the excess and pocket the profit when the price went up.



Miller is charged with lying about a "mistaken" purchase of 1.625 million shares of AAPL (the original customer had requested 1,625 shares) and telling colleagues the customer was covering a short position rather than himself. The transactions happened over the course of the day on October 25, with Miller knowing that Apple's fiscal fourth-quarter earnings would not be revealed until after the markets closed. On top of the fraudulent stock buying, Miller set up a hedge to try and protect himself in case the stock fell. He told a rival brokerage that he was leaving Rochdale and may come to work for them. On October 25, before Apple announced their earnings, Miller told the rival brokerage to sell a half-million shares of AAPL. They did so, earning a healthy profit that would smooth the way for Miller to jump ship if things went bad. Had AAPL gone up and the rival broker lost money, Miller would have kept his job -- and profits -- at Rochdale. Miller has surrendered to the FBI on wire fraud charges and was released on a $300,000 bond, reports the Financial Times. If convicted, he is at risk of up to 20 years in prison. Rochdale, once it became aware of the losses, traded out its positions on AAPL, but not before losing more than $5 million and putting the company's capital at risk, crippling its ability to make speculative purchases or execute customer orders.

Comments on this Article
Print Friendly Version
Email to a Friend
Add MacNN to Your RSS Feeds
Buy from the Apple Store


Related Stories:

Today's MacNN Stories:

  • Chase debuts new TV ad promoting Apple Pay partnership - 7:52 PM EST
  • New iCloud features being held back by 'deep organizational issues' - 3:58 PM EST
  • HitFilm 3 Pro gets new interface design, 3D effects - 3:04 PM EST
  • Older WordPress sites affected by critical cross-site scripting bug - 2:14 PM EST
  • Briefly: Call Recorder for FaceTime, Patriot upgrades LX Series - 1:31 PM EST
  • Commerce Bank gains support for Apple Pay - 1:21 PM EST
  • T-Mobile expands Music Freedom roster to cover 14 more services - 12:47 PM EST
  • Monday Deals: reconditioned 27-inch iMacs, Samsung HDTVs - 12:21 PM EST
  • App Store downloads surge in October off iPhone 6, 6 Plus sales - 11:28 AM EST
  • Watchmakers issue cease-and-desists to smartwatch face creators - 10:38 AM EST
  • 'Apps for (RED)' among Apple efforts for World AIDS Day - 9:29 AM EST

    Today's iPodNN Stories:
  • Hackers target Sony Pictures, took over computers, stole documents - 7:08 PM EST
  • Samsung shipping 4K-capable NX1 mirrorless camera in US this week - 6:30 PM EST
  • Study from CMA says music streaming drives sales better than radio - 4:46 PM EST
  • Briefly: Red BlackBerry Passport pre-orders, Redbox rental rises - 2:54 PM EST
  • BT reportedly in talks to acquire O2, EE UK mobile phone networks - 11:30 AM EST
  • No comments posted on this story yet. Please post yours.
    Your Comments
    In order to post comments, you must be a registered member of the MacNN Forums and logged in. Please login with your MacNN Forums username and password.

    MacNN Forums Login:

    MacNN Forums Password:

    Not a member of the MacNN forums? Register now for free.