Tuesday, 16 April 2013

$1B Apple scheme: Trader admits to huge amount of fraud in Apple stock

$1B Apple scheme: Trader admits to huge amount of fraud in Apple stock, A former Rochdale Securities trader pleaded guilty to wire fraud and conspiracy on Monday, April 15, 2013, according to a report from Reuters. 40-year-old David Miller had an unauthorized purchase of close to $1 billion of Apple Inc stock, and it ended up causing the financial services company's demise.

On Monday in Hartford, CT, Miller entered a plea of guilty before U.S. Magistrate Judge Donna Martinez.

"What happened here was out of character for a kind and generous family man who has lived an otherwise law-abiding and good life," Miller's lawyer Kenneth Murphy said. "He deeply regrets what he has done and the harm it has caused to other people, including the former principals and employees at Rochdale."

Miller's sentencing will happen on July 8, 2013, and he faces a maximum sentence of 25 years in prison. His plea agreement though, could end up helping him out and get him a term of a mere five to eight years.

Miller is currently out on bond, but things could get worse. On Monday, the U.S. Securities and Exchange Commission also filed a civil fraud lawsuit related to the $1B Apple scheme.

The way it went down is that prosecutors state Miller bought 1.625 million Apple shares back on Oct. 12, 2012. This was the day that the company planned to report their third-quarter results/ Miller was looking to profit if Apple's stock share prices rose.

The problem is that Miller falsely told Rochdale that the trade was for a customer, and that they had only ordered 1,625. Rochdale ended up owing $5.3 million of losses on the 1,623,375 shares surplus.

Miller ended up also defrauding another unnamed brokerage company as well in the $1B Apple scheme. He worked them into selling 500,000 Apple shares.

While Apple has been doing better, Miller's bets backfired and he cost a prominent company in Rochdale to fall to pieces.

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