Trader Fraudulently Buys $1 Billion Worth Of Apple Shares, Looks At 20 Years In Prison



On the evening of Apple’s latest earnings call, David Miller, a 40 year old trader at Rochdale Securities LLC, had a great idea. Apple stock price always goes up after an earnings call, right? So what he would do is buy 1.6 million shares of Apple stock worth over $1 billion, then “flip” them the next morning when the stocks rose, pocketing a personal profit of millions of dollars.

A fine plan, don’t you think? There was only one problem: Apple stock actually went down the morning after the latest earnings call. Now Miller is facing 20 years in federal prison for wire fraud, and his trading company might be going under.

The idea, while criminal, was fairly sound. Apple stock price has gone up the morning after earnings calls the past 25 out of 36 times.

The only problem? Not only was the trade unauthorized, but Rochdale can’t actually cover the $5 million bill the debacle cost them, and will need a cash infusion or to be absorbed by another agency to stay afloat.

Miller on his part is claiming that he only intended on buying 1,625 shares for a customer, but that his finger slipped and he accidentally purchased 1.625 million shares instead. The only problem with this defense? He fraudulently involved another broker in his scheme to help sell 500,000 shares.

The lesson in all of this? Don’t buy $1 billion worth of Apple if you can’t actually pay for it.

Source: Bloomberg
Via: Techcrunch