Former trader charged with wire fraud in $1 billion Apple stock purchase
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.
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.
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 $1 million on Oct. 25, as noted by Fortune. Instead, Miller is accused of purchasing 1.625 million shares worth a billion dollars.
Authorities have alleged that Miller thought Apple would beat Wall Street's estimates and the stock price would surge.
Apple reported in late October that its profits were up nearly 25 percent on sales of 26.9 million iPhones and 14 million Macs. But those figures showed a sequential decline in iPad sales ahead of the launch of the iPad mini.
In the weeks that followed Apple's earnings report, its stock plummeted 28 percent from its Peak in September. The drop was so pronounced that it baffled many Wall Street analysts, most of whom advise investors to buy Apple stock.
Comments
If 1625 shares = 1 000 000$
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!
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?
Exact same error on PED's post at CNN Money .... PED is here or copy and paste?
Seems the transaction should have been flagged from the start and not even processed until it could be verified.
WTH is going on with AAPL today? Down $28
Quote:
Originally Posted by Felix Amyot
Come on Apple Insider, you can do some maths???
If 1625 shares = 1 000 000$
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
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?
Originally Posted by Mazda 3s
WTH is going on with AAPL today? Down $28
Probably this. And the true implications of the Cue selloff.
Originally Posted by BeyondtheTech
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.
deleted
Quote:
Authorities have alleged that Miller thought Apple would beat Wall Street's estimates and the stock price would surge.
Surge?
Everybody, and their mom, should know by now that Apple's stock always drops when they meet and exceed estimates.
Or, people are getting all excited by FUD. Digitimes FUD.
Or here's another take on it:
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.
If the stock had gone up and his company had made $5 million, would the guy have still been arrested?