“A former trader was sentenced to 2 1/2 years in prison on Tuesday for an unauthorized purchase of about $1 billion in Apple Inc stock that eventually led to the demise of financial services firm Rochdale Securities,” Joseph Ax reports for Reuters. “David Miller, 41, was sentenced by U.S. District Judge Robert Chatigny in Hartford, Connecticut, seven months after pleading guilty to wire fraud and conspiracy.”
“Prosecutors said Miller, of Rockville Centre, New York, conspired with another individual to buy 1.625 million Apple shares on Oct. 25, 2012, the same day that the company planned to report third-quarter results, in the hopes that the share price would rise,” Ax reports. “The alleged co-conspirator was not named in court papers.”
“Miller falsely told Rochdale the trade was for a customer who had, in fact, only asked to buy 1,625 shares, prosecutors said,” Ax reports. “When the gamble failed, Rochdale faced $5.3 million in losses on the additional unauthorized shares, leaving the firm undercapitalized, according to a related civil lawsuit filed against Miller by the U.S. Securities and Exchange Commission. As a result, the firm eventually collapsed, the SEC said.”
Ax reports, “Prosecutors also said Miller defrauded another brokerage by convincing it to sell 500,000 shares of Apple to hedge against the purchase he had made at Rochdale. The second brokerage, which prosecutors said was able to trade out of the position at a profit, was not identified in court papers.”
Read more in the full article here.
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