Trader pleads guilty to fraud for unauthorized $1B Apple stock gambit
David Miller, who made headlines last year with an unauthorized purchase of $1 billion in Apple stock, plead guilty on Monday to wire fraud and conspiracy before a U.S. magistrate judge.
A former Rochdale Securities trader, the 40-year-old Miller entered a guilty plea in a Hartford, Connecticut court, reports Reuters. In addition to the criminal proceedings, Miller also faces a related civil fraud lawsuit, filed against him by the Securities and Exchange Commission on Monday.
On October 25, Miller bought 1.625 million Apple shares ahead of the company's earnings report, hoping to profit if the stock price went up. Asked by his superiors about the purchase, Miller said that the trade was for a customer that had ordered only 1,625 shares.
Apple's share prices dropped that day, though â despite the company's profits being up 25 percent â and Miller and Rochdale were left down $5.3 million. Due to the unsuccessful bet, the suddenly undercapitalized firm ceased operations shortly thereafter, with its staff leaving or being let go in November 2012. In February, the firm asked that the state of Connecticut, the SEC, and other regulators withdraw its registrations.
Prosecutors contend that Miller also defrauded another brokerage when he induced it to sell 500,000 Apple shares, some of it reportedly in hopes of hedging against the Rochdale purchase.
The Federal Bureau of Investigation picked up Miller on wire fraud charges in December. He now faces a maximum of 25 years in prison, but could get between five and eight years when he is sentenced on July 8 due to a plea bargain.