A former rogue trader in Conn. was charged with scheming to profit personally from unauthorized orders of Apple stock, which backfired and ultimately closed down the firm, Rochdale Securities.
David Miller, 40, of Rockville Centre, N.Y., pled guilty on Monday to one count of conspiracy to commit wire fraud and securities fraud, and one count of wire fraud related to the purchase of 1.625 million shares of Apple stock (NASDAQ: AAPL) worth about $1 billion, 1,000 times the number of shares in an order placed by a client.
Miller conspired with another unnamed individual who is described as a "co-conspirator" to submit an order of Apple stock on Oct. 25, 2012, the day the iPhone maker was scheduled to announce its quarterly earnings.
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The U.S. Attorney's Office for the District of Connecticut said the pair agreed to "write the order in such a way that Miller could later claim he misinterpreted it."
Tom Carson, spokesman for the U.S. Attorney's Office for the District of Connecticut, declined to comment about the "co-conspirator," saying it is an "ongoing investigation."
"David has accepted responsibility and regrets what has occurred. Everyone who knows David knows this is out of character for him," Miller's attorney, Kenneth Murphy of Simon and Partners, said.
Murphy said his client is known in his community as "a kind and good family man."
"This is not consistent with the type of life he had lived up to at this point in time," Murphy said.
"After Apple announced its earnings later [on Oct. 25], the stock price began dropping and it became clear that the trade would not be profitable. When confronted, Miller falsely claimed that he had made a mistake in ordering many multiples of what was written in a client's order," the U.S. Attorney's Office said.
"As a result of this scheme, Rochdale was left holding approximately 1,623,375 shares of Apple. It promptly traded out of the position, but suffered a loss $5,292,202.50," the U.S. Attorney's Office said.
Miller was arrested on Dec. 4, 2012 and was released on a $300,000 bond.
He is scheduled to be sentenced by United States District Judge Robert N. Chatigny on July 8. He faces a maximum of 25 years in prison.