Trader Pleads Guilty in Bizarre Apple Investment Scheme
A former trader from Rochdale Securities entered a guilty plea on Monday, to federal conspiracy and wire fraud charges relating to an unauthorized purchase of Apple (NASDAQ:AAPL) stock, amounting to $1 billion dollars. David Miller submitted his plea to U.S. Magistrate Judge Donna F. Martinez in a Connecticut court, and also entered into a partial civil settlement with the SEC, the agency said.
Apparently, Miller had entered an order for 1.625 million shares of Apple, on behalf of customer. In reality, the customer had placed an order for 1,625 shares, and Miller was using the opportunity to personally profit from the unauthorized buy orders. The SEC reported that when the ploy backfired, it caused the subsequent collapse of the firm, after taking burden of the 1.6 million share loss.
The maximum penalty for Miller is 25 years behind bars, but under a plea deal, he could get away with 5-8 years in prison. Miller is currently free on bond.
Prosecutors allege that Miller also roped in another firm, and convinced them to sell 500,000 shares of Apple in efforts to hedge his purchase at Rochdale. According to MarketWatch, Miller planned to split the customers profit if Apple’s stock was profitable, and if the stock decreased he would claim that he erred on the size of the order.
Rochdale is not a defendant in the case, or accused of any wrongdoing. The firm was forced to withdraw its registrations from the state of Connecticut and the SEC on February 25th.
Don’t Miss: Is Apple In Trouble for Banning This App?