Morgan Stanley paying $4 million to SEC over unauthorized purchase of $525 million in Apple stock

“Morgan Stanley has agreed to pay $4 million to settle federal charges of failing to prevent the unauthorized purchase of $525 million in Apple stock by one of its customers,” Marcy Gordon reports for The Associated Press.

“The Securities and Exchange Commission announced the settlement Wednesday with the big Wall Street bank,” Gordon reports. “The SEC said Morgan Stanley violated a rule requiring brokerage firms to have strong risk measures in place before they give customers access to the markets.”

“In this case, a trader at customer firm Rochdale Securities made orders to buy Apple stock in October 2012 that exceeded Rochdale’s trading limits, according to the agency. The trader used the stock purchases to commit fraud by personally profiting from the trades, the SEC said,” Gordon reports. “New York-based Morgan Stanley neither admitted nor denied wrongdoing but did agree to refrain from future violations of the rule involved in the case, known as the market access rule. ”

Read more in the full article here.

Related articles:
Rogue trader gets 30 months in prison for $1 billion Apple stock scheme – November 20, 2013
Ex-Rochdale broker pleads guilty in Apple stock buy case – April 15, 2013
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


  1. Eyeroll. So: they did not admit wrongdoing, yet paid a large fine for it, and promised not to do it again. Why, that’s tantamount to not denying wrongdoing, which they also did not do.

    Must be some twisted corporate version of logic, in which not being forced to admit wrongdoing is almost as good as innocence.

  2. more of the same. Wall Street gets a slap flor getting caught, has to admit to nothing (no record of guilt), and pays token penalty which is probably tax deductible. It is clear they are above the law and they know it

    1. I remember the case. The guy from Rochdale Securities was convicted. Morgan merely let the guy buy more than should have been allowed. Sloppy security, but Morgan wasn’t a knowing participant of the fraud.

    2. From the article:

      “Miller pleaded guilty to criminal charges of conspiracy and fraud, and was sentenced to two and a half years in prison in November 2013.”

      Rochdale also went out of business because of this.

    1. From the article:

      “Miller pleaded guilty to criminal charges of conspiracy and fraud, and was sentenced to two and a half years in prison in November 2013.”

      Rochdale also went out of business because of this.

  3. Well at least all the claims on here claiming fail play when something strange happens with the stock is proved to be correct at long last. Though apparently blatent manipulation of the stock price for personal gain is deemed only a minor infringement worth no more than a tap on the wrist. How amusing of the SEC.

  4. and the fools call obama a socialist… he is so far into wall streets pocket – he makes no attempt by way of his administration to reign in the thievery or the continued capture of regulatory agencies by the very industries they were created to police.

    ya can’t get much more capitalistic than that

  5. these fine is too small. on 525,000,000 dollars, 4 million is just the cost of doing business, well, i believe that’s the terms they would use behind closed doors. the idea, that if you fine these companies they will just pass the cost on to their customers is true, because those that run the companies do not want to feel the pains of lower quarterly profits. (stockholders looking for new management, reporters asking questions, lawyers and courts…, oops, stock price going down) i believe they should have to face those things. for the most part, shareholders are not paying attention to what these guys and ladies do, they just listen for the quarterly returns. in order for the ceo(s) and managers to get it, it’s the shareholders that must feel it. the way the shareholders take notice is, if quarterly profits for several quarters are affected by big fines. that also means customers must choose to do business elsewhere because the higher fees they pay, from management trying to make up for the lost due to fines, will make up the short fall of those loss dollars. let’s be clear, once those fees go up they don’t come down. why don’t they come down? think about it, the company would be admitting they were charging too much for a service, and they believe you will notice and want to know why.

    the fine should have been $525,000,000 plus any changes in the stock price believed due to this transaction, up and down. apple’s stockholders and apple should sue morgan stanley since this 4 million will not deter them or others from doing the same thing in the future.

    it’s odd, law enforcement sees fit to arrest a man for possibly selling cigarettes out of a pack of cigarettes, but can’t find anybody to arrest in these multimillion dollar cases, which cost the taxpayers millions of dollars. do kid yourself, these large companies are using the system like crazy. (what do you think it cost for the judge, the lawyers that investigate, the clerks, the lights, the buildings, …) wrong doing in the stock market can end of costing thousands of people their jobs, not to mention dollars from 401Ks, pensions, corporate planning… i’m sorry for the rambling, somebodies need to go to jail.

    if a few people go to jail at these companies there’s going to be some job openings. people can move up in the company. new hires could be added. the bottom line is the economy keeps moving even if the ceos and their vp(s) and their managers end up in jail… might even help economy, it should certainly help the market’s integrity.

    1. From the article:

      “Miller pleaded guilty to criminal charges of conspiracy and fraud, and was sentenced to two and a half years in prison in November 2013.”

      Rochdale also went out of business because of this.

      Morgan Stanley simply had lax security while facilitating the trade. I’m sure Mr. Miller was aware of this hole, which he then exploited for his gain (and eventual demise).

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