Feeds

Apple share dive scuppers trader's alleged get-rich-quick fraud scam

Fruity FAIL leaves accused with $1bn of duff stock

Internet Security Threat Report 2014

A US trader has been charged with fraud by the Feds over a get-rich-quick scheme involving over 2 million Apple shares and $1bn.

The trader, David Miller, bought 1.625m shares in Apple on October 25 this year, the day that the fruity firm was scheduled to announce its earnings for the quarter. Miller told his bosses at Rochdale Securities that he was buying the shares for a customer and it was the customer who would lose money if Apple's share price somehow fell.

Unfortunately, Apple's stock price did drop after the earnings result, leaving Rochdale with the losses. Miller appeared to already have a way out of the situation, since the customer actually did order 1,625 fruity shares, so he just claimed that all those extra zeroes were a mistake.

But Miller already had himself backed up another way, having convinced another broker to take a short position on 500,000 Apple shares, claiming he was trading for a company that he had no relationship with. In shorting, the broker would have borrowed the shares and sold them on before the earnings release, after, when the stock went down, he buys the shares again and the new lower price and repays them, pocketing the difference.

The short position was intended to hedge against the huge purchase of Apple stock he'd made at Rochdale. Rochdale ended up with 1.6m Apple shares that it had to sell on at a loss of around $5m.

“As alleged, this defendant orchestrated the unauthorised purchase of approximately $1 billion of Apple stock in a fraudulent get-rich-quick scheme that backfired, causing massive losses for his employer,” US Attorney David Fein said in a canned statement. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.