A former trader at Rochdale Securities pleaded guilty to conspiracy and wire fraud months after he made an unauthorised attempt to profit from the $1bn purchase of Apple stock with the trading group’s funds.
David Miller, 40, faces a maximum 25 years in prison and up to $500,000 in fines in connection to the charges. Mr Miller and an unnamed co-conspirator attempted to profit from buying 1.63m shares of Apple on October 25, when the technology company was to report quarterly earnings, according to the US attorney’s office for the district of Connecticut.
The unauthorised trades forced Connecticut-based Rochdale to wind down the large position in Apple at a loss of $5.3m, leaving it with a severe capital shortfall. In February, the company filed to withdraw its registration with the Securities and Exchange Commission.
Kenneth Murphy, attorney for the defendant, said: “David pleaded guilty and accepted responsibility. He deeply regrets what he has done and the harm it has caused others, including the Rochdale folks. When the time comes he will accept punishment and he’ll spend his life making up this.”
Mr Miller and the co-conspirator allegedly devised the plan to make it appear that he had misread the buy order in the event Apple shares declined, according to the complaint. Mr Miller also defrauded another broker-dealer into taking a short position of 500,000 Apple shares to act as a hedge, according to the complaint.
“This defendant participated in a fraudulent scheme in which he would either reap huge profits through the unauthorised purchase of approximately $1 billion of Apple stock or, if he faced huge losses, explain it away as simple human error,” said US Attorney David Fein.
Mr Miller is set to be sentenced in federal court on July 8.
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