$1-bn fraudulent purchase of Apple share leads to broker's arrest
06 Dec 2012
A fraudulent $1 billion purchase of Apple stock has led to the arrest of a Wall Street trader and the loss of $5 million for his brokerage firm.
According to the office of the District Attorney in Connecticut, trader David Miller of Rochdale Securities hatched a plan to put the brokerage's money into buying 1.625 million shares of Apple stock on 25 October.
Miller was hoping to make some quick profits from a rise in Apple's stock after the company reported its Q4 2012 financials later that afternoon.
The plan, however went awry with the stock falling and the brokerage losing money. In a bid cover up his plan Miller said he wanted to buy 1,652 shares for a customer, and accidentally entered the wrong amount.
The brokerage ended up holding 1.6 million shares of Apple stock and lost $5 million while trading out of the position. Miller also allegedly defrauded another broker-dealer making claims of representing a company that he had no affiliation with and one for which he had no authorisation to trade. He surrendered to the FBI this week.
Miller allegedly represented the transactions as a customer order gaining the position over the course of the day. He told falsely told witnesses that his customer was covering a short position in Apple.
A conviction would see Miller face up to 20 years in prison. He was released on a $300,000 bond after he appeared before a US federal judge in Connecticut.
