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Former trader charged with wire fraud in $1 billion Apple stock purchase

post #1 of 19
Thread Starter 
An unauthorized purchase of $1 billion in Apple stock cost Rochdale Securities LLC $5 million, and has led to the arrest of a former trader with the company.

David Miller was nabbed by the Federal Bureau of Investigation in connection with the fraudulent stock purchase, and was charged with wire fraud, according to Bloomberg. Miller appeared before U.S. Magistrate Judge Holly Fitzsimmons in Bridgeport, Conn., on Tuesday.

After appearing before the judge, Miller was released on $300,000 bail. The trade in question occurred around the time Apple reported its most recent quarterly earnings in October.

Rochdale Securities, based in Stamford, Conn., has been "struggling to survive and hold on to its staff after Miller's trade," Wednesday's report said.

A client had asked Rochdale securities to purchase 1,625 shares of Apple stock, worth about $1 million on Oct. 25, as noted by Fortune. Instead, Miller is accused of purchasing 1.625 million shares worth a billion dollars.

Stock


Authorities have alleged that Miller thought Apple would beat Wall Street's estimates and the stock price would surge.

Apple reported in late October that its profits were up nearly 25 percent on sales of 26.9 million iPhones and 14 million Macs. But those figures showed a sequential decline in iPad sales ahead of the launch of the iPad mini.

In the weeks that followed Apple's earnings report, its stock plummeted 28 percent from its Peak in September. The drop was so pronounced that it baffled many Wall Street analysts, most of whom advise investors to buy Apple stock.
post #2 of 19
Come on Apple Insider, you can do some maths???

If 1625 shares = 1 000 000$

How Can
1 625 000 000 shares = 1 000 000 000$? Volume discount?


Or was it 1.625 million shares? Or should you just forget the dot and use 1 625?
Edited by Felix Amyot - 12/5/12 at 5:59am

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post #3 of 19
Quote:
Originally Posted by Felix Amyot View Post

Come on Apple Insider, you can do some maths???
If 1625 shares = 1 000 000$
How Can
1 625 000 000 shares = 1 000 000 000$? Volume discount?
Or was it 1.625 million shares? Or should you just forget the dot and use 1 625?

So he bought a million times the number of shares at just a 1000x price difference? That's some volume discount! 1smile.gif

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"Apple should pull the plug on the iPhone."

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post #4 of 19
Well, at least they did correct it now! I'm not normally a grammar troll but when the whole point of your article relies on a dot, a comma or a space, I think it's worth giving it some attention!

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post #5 of 19

Note that the trader bought 1.625 million Apple shares for a customer, who claims he only requested 1625 shares. This help push Apple shares down 28% and cost the brokerage firm a $5 million loss.

Fraud or fat fingers?

post #6 of 19
How on earth does someone spend 1 billion and think they can get away with it. I understand a few more shares. Maybe even pushing 10% more. But a factor of 1000x? That can't possibly... Wow.
post #7 of 19
Quote:
Originally Posted by Felix Amyot View Post

Come on Apple Insider, you can do some maths???
If 1625 shares = 1 000 000$
How Can
1 625 000 000 shares = 1 000 000 000$? Volume discount?
Or was it 1.625 million shares? Or should you just forget the dot and use 1 625?

Exact same error on PED's post at CNN Money .... PED is here or copy and paste?
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #8 of 19

Seems the transaction should have been flagged from the start and not even processed until it could be verified.
 

post #9 of 19

WTH is going on with AAPL today? Down $28

post #10 of 19
Quote:
Originally Posted by Felix Amyot View Post

Come on Apple Insider, you can do some maths???
If 1625 shares = 1 000 000$
How Can
1 625 000 000 shares = 1 000 000 000$? Volume discount?
Or was it 1.625 million shares? Or should you just forget the dot and use 1 625?

 

Quote:
Originally Posted by Felix Amyot View Post

Well, at least they did correct it now! I'm not normally a grammar troll but when the whole point of your article relies on a dot, a comma or a space, I think it's worth giving it some attention!

 

Heh, kind of fun to mock them for the silly mistake?

 

Can we mock you for not knowing that there is no way the transaction could be for 1.625B shares?

post #11 of 19
Originally Posted by Mazda 3s View Post
WTH is going on with AAPL today? Down $28

 

Probably this. And the true implications of the Cue selloff.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #12 of 19
So basically this is the Wall Street version of the lady who tried to go into the AT&T store years ago to buy $10,000 worth of iPhones to make $100,000?
post #13 of 19
Originally Posted by BeyondtheTech View Post
So basically this is the Wall Street version of the lady who tried to go into the AT&T store years ago to buy $10,000 worth of iPhones to make $100,000?


That would've worked, though (it was launch 2007, right?). Minus the cut that eBay takes, of course. lol.gif

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #14 of 19

deleted


Edited by MacRulez - 1/28/13 at 8:36pm
post #15 of 19
Stock manipulation by the big boys.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #16 of 19
Quote:
Originally Posted by Tallest Skil View Post

Probably this. And the true implications of the Cue selloff.

Or, people are getting all excited by FUD. Digitimes FUD.
Quote:
Apple concerns a 'misinterpretation,' says analyst
1 minutes ago - Dow Jones News

Apple Inc.'s (AAPL) shares were down 4.7% to $548.79 on Wednesday afternoon, and part of the reason may be stemming from a production report out of Taiwan that may be "misinterpreted," according to Piper Jaffray analyst Gene Munster. In a note to clients, Munster address a report in Taiwan's Digitimes trade paper that says Apple may be cutting down parts orders for the iPhone 5 for the March quarter. "We believe this 20% decline is to be expected coming off of a launch quarter and do not believe it is an indication of how units might trend in March," he wrote, adding that the implied inventory fill from those orders means his 43 million iPhone shipment target for that period "is well within the range of probability." He also briefly addressed some other concerns around the shares, including reports that "margin requirements" were being raised at some clearing houses, but maintained his $900 price target, calling the "pullback" a "buying opportunity."
-Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #17 of 19
Quote:
Originally Posted by Mazda 3s View Post

WTH is going on with AAPL today? Down $28

Or here's another take on it:
Quote:
UPDATE 4: Wednesday's big movers; Margin hike dings Apple
38 minutes ago - Dow Jones News


By Sue Chang and Barbara Kollmeyer, MarketWatch

SAN FRANCISCO (MarketWatch) -- Shares of Citigroup Inc., Freeport-McMoRan Copper & Gold Inc., and Pandora Media Inc. made big moves during U.S. trading Wednesday, while Apple Inc. and Citigroup Inc. were among top trending tickers.

Top tickers trending

$AAPL: Apple's (AAPL) stock slumped 4.8%. Some clearing firms are reportedly raising the margin requirement for Apple shares. StreetInsider.com said COR Clearing raised its margin requirement for Apple to 60% from 30%.

Laurence Balter, principal with Oracle Investment Research, told Barron's that this is due to the rogue trader at Rochdale Securities whose unauthorized trade in Apple shares resulted in a $5 million loss for the brokerage.

Apple is also due back in court for a post-trial hearing in its fight with Samsung Electronics on Thursday. When it goes before the judge, it will seek to impose injunctions on various Samsung products which it says infringed on its patents while Samsung will try to get a new trial and reduce the $1-billion verdict. Here's a quick laundry list of what Apple and Samsung will be arguing over from allthingsd.com:

Separately, market researcher International Data Corporation raised its 2012 forecast for the global tablet market to 122.3 million units from its previous forecast of 117.1 million. It also said its 2013 forecast to 172.4 million versus 165.9 million units previously and by 2016, global shipments are likely to reach 282.7 million units.

Android's tablet share is expected to rise to 42.7% in 2012 from 39.8% in 2011 while Apple's share will slip to 53.8% from 56.3%. "Windows-based tablets (including Windows 8 and Windows RT) will grab share from both iOS and Android, growing from 1% of the market in 2011 to 2.9% in 2012, on its way to 10.2% in 2016," IDC said in its report.

@NorthmanTrader: $AAPL is holding the entire class back.

@market_raven: Apple is about to be marked for death... $AAPL

@AsifAmeer_AP: $AAPL is rising downwards.

@tomliberti: If the #fed would stop buying treasuries and start buying $AAPL the world will be fixed.

@davidpbaskin: $AAPL can be seen as either a real company with products, or as a trading vehicle for speculators and hedge funds. Clearly the latter today.

@GMoore34: $AAPL pummeled for being in the midst of a record breaking quarter and $C up big on plans to layoff 11k people. Makes 0 sense.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #18 of 19
Um... how does this story have anything to do with why Apple would be up or down today?

A story about strange trade for $1 Billion... that has nothing to do with Apple's business...

And a few million $ sale by a a few executives to get out of the way of next years new tax rates (which *EVERBODY* with any massive decade long capital gains is doing).

This stuff is going to cause AAPL to lose $2.5 Billion in market cap?

Um... no.
post #19 of 19

If the stock had gone up and his company had made $5 million, would the guy have still been arrested?

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