“A former Rochdale Securities LLC trader pleaded guilty to federal conspiracy and wire fraud charges in connection with an unauthorized $1 billion purchase of Apple Inc. stock,” Christie Smythe reports for Bloomberg.

“David Miller, 40, entered his plea today before U.S. Magistrate Judge Donna F. Martinez in Hartford, Connecticut, prosecutors said in a statement,” Smythe reports. “Miller faces a maximum of 25 years in prison at a sentencing scheduled for July 8, according to prosecutors. ‘This defendant participated in a fraudulent scheme in which he would either reap huge profits through the unauthorized purchase of approximately $1 billion of Apple stock or, if he faced huge losses, explain it away as simple human error,’ U.S. Attorney David B. Fein in Connecticut said in a statement.”

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“Prosecutors said Miller bought 1.625 million Apple shares on October 25, 2012, the day the maker of iPads, iPods and iPhones planned to report third-quarter results, hoping to profit if the company’s share price rose,” Jonathan Stempel reports for Reuters. “But they said Miller falsely told Rochdale that the trade was for a customer that had in fact ordered just 1,625 shares.”

“When the bet backfired, Rochdale was on the hook for $5.3 million of losses on the extra 1,623,375 shares, leaving the Stamford, Connecticut-based company undercapitalized, the SEC said in court papers,” Stempel reports. “According to prosecutors, Miller also defrauded another brokerage by inducing it to sell 500,000 Apple shares, hoping to partially hedge against the purchase he had made at Rochdale. Court papers did not identify the second brokerage.”

Stempel reports, “The SEC said as a result of Miller’s bets, Rochdale ceased operations and its staff left or was fired in November 2012. On February 25, Rochdale asked Connecticut, the SEC and other regulators to withdraw its registrations.”

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MacDailyNews Take: Fool. Throw the book at him.

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Former Rochdale Securities trader arrested in fraud scheme involving Apple stock – December 4, 2012
Apple’s stock has the flu; FBI probing rogue trader at Rochdale Securities – November 6, 2012
Rochdale said to seek capital lifeline after AAPL trading error – November 2, 2012