A former Rochdale Securities trader whose unauthorized purchase of about $1 billion of Apple stock caused the demise of the financial services company pleaded guilty on Monday to wire fraud and conspiracy.
David Miller, 40, entered his guilty plea before U.S. Magistrate Judge Donna Martinez in Hartford, Connecticut.
Miller faces a maximum 25 years in prison when he is sentenced on July 8, but under a plea agreement he could receive a term of five to eight years. The Rockville Centre, New York resident is free on bond…
Prosecutors said Miller bought 1,625 million Apple shares on October 25, 2012, the day the maker of iPads, iPods and iPhones planned to report third-quarter results, hoping to profit if the company’s share price rose.
But they said Miller falsely told Rochdale that the trade was for a customer that had in fact ordered just 1,625 shares.
When the bet backfired, Rochdale was on the hook for $5.3 million of losses on the extra 1,623,375 shares, leaving the Stamford, Connecticut-based company undercapitalized, the SEC said in court papers…
The SEC said as a result of Miller’s bets, Rochdale ceased operations and its staff left or was fired in November 2012. On February 25, Rochdale asked Connecticut, the SEC and other regulators to withdraw its registrations.
So much for counting on the industry kingpins to regulate themselves. So much for providing oversight – preventing deception and fraud. Things were sufficiently lax to kill the company providing the opportunity to commit the crime.