Feeds

Rogue trader gets 2½ years for BILLION-dollar Apple share plot

Bad bet on fruity firm's stock price throws spanner in illegal scheme's works

Secure remote control for conventional and virtual desktops

A rogue trader has been sentenced to 30 months in prison for his scheme to profit from an unauthorised purchase of a billion dollars of Apple stock.

The doomed plan – which eventually led to David Miller's employers being forced to put their biz up for a merger or fresh investment – was to buy millions of Apple shares on 25 October, 2012 – the same day the company planned to report its third quarter results. The expectation was that the fruity firm's share price would go up after the announcement.

According to prosecutors, Miller was working at Rochdale Securities LLP when he conspired with another unnamed individual to buy the stocks illegally on behalf of one of his customers. The co-conspirator agreed to write an order for 1,625 Apple shares in a way that Miller could later claim he misinterpreted.

Miller would then buy a thousand times the number of shares – that is, 1,625,000 – and if the trade was profitable, he and his accomplice would split the profits. However, if it turned out to be a bad bet, Miller would claim he'd made a mistake, leaving Rochdale with the losing position.

When Apple announced its earnings, the stock price started falling. Miller put his Plan B into action and claimed he'd mistakenly ordered too many shares, leaving Rochdale holding around 1.6 million Apple stocks. Trading out of that position caused the securities firm to suffer a loss of $5.3m – at which point regulatory requirements stopped it from continuing to buy and sell stocks, effectively killing the business.

While all this was going on at Rochdale, Miller had also convinced another unnamed broker to take on a short position in Apple stock – selling shares in the hope of buying them back at a lower price – to hedge against his scheme at Rochdale falling apart. He falsely claimed that he was trading for the account of a company that was not a customer of his and got the dealer to short 500,000 Apple shares. Although the unnamed broker was at risk of big losses, he/she was the lucky one since the bet paid off, leaving him/her with a profit.

Miller was arrested in December last year and pleaded guilty to one count of conspiracy and one count of wire fraud. As well as the two-and-a-half years in jail, followed by three years of supervised release, Miller has also been ordered to make full restitution to Rochdale. ®

Build a business case: developing custom apps

More from The Register

next story
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.