Trader arrested in $1bn Apple stock case

PanARMENIAN.Net - A former Rochdale Securities LLC trader was arrested on wire fraud charges in connection with an unauthorized $1 billion purchase of Apple Inc. stock that backfired, costing his company $5 million, Bloomberg reported.

David Miller, 40, appeared before U.S. Magistrate Judge Holly Fitzsimmons in Bridgeport, Connecticut, after surrendering to the Federal Bureau of Investigation, prosecutors said. He was released on $300,000 bail, they said.

The Stamford, Connecticut-based brokerage has been struggling to survive and hold on to its staff after Miller’s trade, made about the time of the Cupertino, California-based technology company’s October earnings release.

“As is so often seen in these types of cases, the alleged criminal conduct of Miller was for personal gain at the expense and detriment of others,” FBI agent Kimberly Mertz said in a statement. “Manipulating and orchestrating stock transactions in such a manner is a very serious criminal offense and its impact can be both devastating and lasting.”

Wire fraud carries a maximum sentence of 20 years in prison, according to prosecutor.

Rochdale’s executives are seeking a deal to rescue the 37- year-old firm, either through a cash injection of about $5 million or a merger with another broker.

The government alleged Miller misled the brokerage on Oct. 25 by placing an order for 1.6 million shares of Apple that he said was for a customer. The customer claimed to only have sought 1,625 shares, according to the complaint. The brokerage was left shouldering a loss on the 1.6 million shares, according to the complaint.

Miller was also accused of misleading another brokerage, which wasn’t named in the complaint, on Oct 25, causing it to take a short position on 500,000 Apple shares. The brokerage was able to trade out of the position at a profit, according to the complaint.