A fraudulent US$1 billion purchase of Apple stock has resulted in the arrest of a Wall Street trader and the loss of US$5 million for his brokerage firm. According to the District Attorney's office in Connecticut, trader David Miller of Rochdale Securities hatched a plan to use the brokerage's money to buy 1.625 million shares of Apple stock on October 25. Miller was hoping to cash in big on a rise in Apple's stock after the company reported its Q4 2012 financials later that afternoon.
Miller's plan went awry when the stock fell and the brokerage started losing money. Miller allegedly tried to cover his tracks by falsely claiming he wanted to buy 1,652 shares for a customer, and accidentally entered the wrong amount. The brokerage was left holding the bag on 1.6 million shares of Apple stock and lost $5 million when it traded out of this position.
Leading up to this billion dollar trade, Miller allegedly defrauded another broker-dealer by claiming to represent a company that he had no affiliation with and one for which he was not authorized to trade. Miller surrendered to the FBI this week and faces up to 20 years in prison.