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

Internet Security Threat Report 2014

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. ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
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?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.