AppleInsider Staff
A Connecticut court on Tuesday sentenced former trader David Miller to 30 months in prison for enacting and conspiring on an unauthorized purchase worth $1 billion of Apple stock.
U.S. District Court Judge Robert Chatigny's ruling puts an end to the seven-month long case, which saw Miller plead guilty to wire fraud and conspiracy, reports Reuters.
In December 2012, Miller was arrested by the U.S. Federal Bureau of Investigation for a fraudulent stock purchase and was subsequently charged with wire fraud. Prosecutors in the case said the trader conspired with one other person to buy 1.65 million shares of AAPL stock on Oct. 25, 2012, on the chance that prices would rapidly increase after a quarterly earnings announcement scheduled for that day. The second person remains unidentified.
According to reports, a client had informed Miller to make a buy of 1,625 AAPL shares, worth $1 million. Instead, the trader purchased 1.625 million shares worth $1 billion. Miller's former employer Rochdale Securities was reportedly put out of business due to the illegitimate buy.
Rochdale ended up facing $5.3 million in losses on top of the unauthorized share purchase, forcing the firm to shut its doors, according to documents from a parallel civil suit involving the Securities and Exchange Commission.
In addition, Miller is said to have persuaded another firm to sell 500,000 shares of Apple stock as a hedge against his billion-dollar bet. Court filings indicate the brokerage, which has also gone unnamed, was able to come out of the ordeal with a profit.
Christine McKee
Malcolm Owen
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Amber Neely
24 Comments
Good!
Now, let's see a few of those analysts behind bars too where some of them belong.
Manipulating stocks is illegal, even though the SEC doesn't really seem to give a crap about it in most cases.
Where is the conviction for Angelo Mozilo, CEO of CountryWide Mortgage, fraudster of $1.4 trillion?
This was supposed to be a "sure thing" as Apple was flying high leading up to the buy... then the fertilizer his the air supply; Apple dropped. Lutzes were had. Soon the Ethiopian in the fuel supply was spotted hiding under his desk and good deeds were punished and his employer went toes up.
I might be missing something here, but what's wrong with buying a lot of shares? Did he gamble using his parent company's money to do so? Would appreciate some more info from someone better versed in the stock market than I.
[quote name="DarkLite" url="/t/160811/former-trader-sentenced-to-30-months-in-prison-for-fraudulent-1b-aapl-purchase#post_2437542"]I might be missing something here, but what's wrong with buying a lot of shares? Did he gamble using his parent company's money to do so? Would appreciate some more info from someone better versed in the stock market than I. [/quote] Unauthorized