Apple trader arrested in $1 billion wire fraud
Summary: A trader for Rochdale Securities has been arrested over allegations of fraudulent schemes relating to purchases of Apple stock.
David Miller, a trader for Rochdale Securities, Stamford, has been arrested today based on a federal criminal complaint charging him with wire fraud.
The Federal Bureau of Investigation (FBI) claims that the 40-year-old trader was part of a fraudulent scheme when employed as a trader for Rochdale Securities. In a "get-rich-quick" scheme, Miller allegedly orchestrated an unauthorized purchase of roughly $1 billion in Apple stock, which left his employer with severe financial losses.
Within the criminal complaint, the FBI say that Miller cooked up a quick way to make money by purchasing 1.625 million Apple shares Apple with the brokerage's money on October 25 this year, the same day that the iPad and iPhone maker was due to release their quarterly earnings. The pinnacle point of this transaction was simple; expecting stocks to rise, Miller would make a nice chunk of change.
However, the purchase backfired, as Apple stocks fell, leaving Rochdale Securities with a serious problem.
Miller did not use his own cash reserves -- naturally -- to fund the purchase, and told his employers it was an honest mistake, as he meant to purchase 1,625 Apple shares, rather than 1,625,000 -- which was a result of multiple copies of the same order. As the shares were bought with the brokerage's money, Rochdale bore the financial loss.
As a result, Rochdale Securities was left with over 1.6 million shares of Apple stock. Even thought the firm rapidly traded out, it still suffered financial losses of approximately $5 million.
The Feds also say that the trader may have defrauded another broker-dealer at the same time. Through "misrepresentations" it is alleged that Miller convinced an unrelated company to sell 500,000 Apple shares in order to conduct the larger get-rich-quick scheme at Rochdales.
"As alleged, this defendant orchestrated the unauthorized purchase of approximately $1 billion of Apple stock in a fraudulent get-rich-quick scheme that backfired, causing massive losses for his employer," stated U.S. Attorney Fein. "I commend the FBI, with the substantial assistance of the SEC and FINRA, for its rapid response and for bringing this defendant to justice. The U.S. Attorney’s Office and our many partners on the Connecticut Securities, Commodities and Investor Fraud Task Force are committed to protecting investors and the integrity of American capital markets."
Miller surrendered himself to the FBI today in Bridgeport, and has been released on a $300,000 bond. The allegations are being investigated by the FBI, and if found guilty of wire fraud, Miller could face a maximum term of 20 years behind bars.
The investigation is ongoing.
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An Honesr Mistake
The crime is those who made the Apple stock go down when, rightly so, it should have risen.
Hope that's sarcasm
Sure hope this is sarcasm.
In my opinion Apple is worth Zero
awww
there's a sad, tragic commentary about the state of labor in the US if Foxconn thinks the US is a good market for them
anyway... golly gee, won't that make you change your mind about Apple? Nah, me neither.
Foxconn ... state of labor in the US...
Foxconn has had them in the US for many years... (~10,000 employees in Texas alone?)
The issues of labor content in electronics products is much more complex than the simple reportings on Foxconn , China and Apple presently in the media.
I am not a Fan boy of Apple, but would like to see more constructive/informed observations on the issues.
oh please
Tell it to someone who hasn't been over there and seen factories like Foxconn. I've been complaining about this sort of exploitative labor long before Apple released their first iPod. Motorola and HP were actually the first to take advantage, Apple is just the biggest offender at the moment.
It's simpler than that
Ideally, since electronics is already so ubiquitous, their production will be distributed all around the world -- just like food and anything else.
Sigh
"A MacBook is produced by little kids in China under inhuman conditions."
Oh? So the MacBook is NOT made in a Foxconn factory? Oh wait, it is. Then maybe I was wrong in that Apple paid for an independent thrid party audit of the Foxconn factories they used to manufacture their products and then publicly release those findings? No, I was right. Then I guess Apple did nothing about it? Whoops, wrong again - Apple did do something and Foxconn straightened up their act so no child labor is being used to make Apple products. Too bad we can't say the same thing about Samsung's products, right? O and those same Foxconn plants that make the MacBooks... they also make Dell, HP, and Toshiba products. So what are YOU using?
"The operating system, MacOS, is just an illegal copy of AT&T's (40-year old) Unix with a Linux-like graphical user interface."
Actually old boy the current version of the MacOS is a unix-based system that incorprates elements of the unix-based NextOS that was developed by Next Computers that was owned by Steve Jobs and elements of the prior versions of the Apple Mac OS that was based on work that Apple licensed from Xerox. Now if XEROX illegally used AT&T's tech then that is a separate issue.
What other FUD and lies do you have?
"...Apple licensed from Xerox ..."
We're not talking about the UI stuff that Xerox allowed Jobs to LOOK AT, in return for Xerox being allowed to purchase some Apple stock, are we?
No payment, no license.
Any more Apple cheerleading?
Not cheerleading
http://en.wikipedia.org/wiki/History_of_Apple
http://www.zurb.com/article/801/steve-jobs-and-xerox-the-truth-about-inno
Interestin that you could not refute anything else I wrote - why is that?
What else you got radleym?
A note on AT&T UNIX "copyrighted work"
In 1992 there was this company BSDI (Berkeley Software Design, Inc), that was created by members of Berkley's CSRG group. (more: http://en.wikipedia.org/wiki/Berkeley_Software_Design -- a bit dense).
At that time, typical AT&T UNIX license for microcomputers was around $5000 and this price did not even include compilers or any GUI. A source-code license would cost upwards of $100,000 and only if you were lucky to be "approved" by AT&T. Plus, at the time AT&T UNIX had no networking of the kind we understand today. TCP/IP was available as (yet more expensive) add-on packages and didn't really integrate with the OS, but rather applications. You would pay for the number of users accessing the system, too.
BSDI was selling full BSD UNIX 4.3 with all the source code, GUI etc and unlimited users for $1000.
Compare $1000 with way over $100,000 and you get the picture. AT&T got mad and tried to sue BSDI to death. They later tried to involve the UC Berkeley and finally it was found out that AT&T originated code comprises less than 10% of the BSD UNIX code and that the remaining 90% of the then current AT&T UNIX was... coming from the Berkeley's BSD project. At that time AT&T decided they would be better to negotiate (undisclosed) court case termination and withdraw all their allegations -- in return, BSDI should ship their new version based on BSD 4.4 (which they were waiting for and going to ship anyway, by that time).
By the way, at that time Sun had their Solaris OS based on BSD. But, scared by these AT&T tactics, they decided to switch to AT&T's System V, which was an huge step back, especially in networking architecture and was dragging Sun down for years.
Funny thing is history. Most people have no clue of it and yet other people create all sorts of legends that suits their agenda.
crApple
Slow down.
Why is it you have to talk like a loony tune. Same quality hardware as a $1000 Macbook for $150? Seriously man. Thats trash talk.
You should get a job with Apple then, they would make you rich. You get them the same hardware at 15% of whats now their sale price, they set their profit margin to 300% on top of hardware cost and they can sell their products at only 80% of what they now charge, their profit margin increases and they no doubt improve on market share at their new lower prices.
Somehow...I think your a liar. Or the greatest bargain hunter of all time in history.
Actual Cost .....
And while I'm on a roll .....
The price is about salary and buildings and heating and A/C...
Overhead is the total cost of any product you buy today. Manufacturing and parts costs only start to dominate when you are using CNC machining and other robotics which are also sold with similar costs involving overhead.
You get what you pay for. Pay for a device via mail order and you get the device. Buy something from a company with a storefront and you have lots more opportunity for support. Any Apple product you buy, with Apple Care support (and the initial warranty) will give you no more than a two day turn around on any service you need in my experience.
If your HP, Dell, Toshiba, WuHok or some other brand laptop needs service, where do you take it? Do the people there have training on all aspects of repair? Do they have a vested interest in doing the right thing for you?
Think about what you are paying for when you buy the $150.00 computer.
@ usnames Re: In my opinion Apple is worth Zero
Actual numbers of change in value: (1) 1 year 12/5/11 to 12/5/12 +37.09%. (2) 2 years +68.29%. (3) 5 years +177.30%.
Disclaimer: I am not an Apple fanboy. I have never owned any Apple product or stock.
Thanks
By the way, Apple indeed seems to want to be worth zero (stocks wise), as they sit on a huge pile of (operational) cash. In reality, Apple does not need any stockholders and their stock price is highly irrelevant (for the company). But, since it fluctuates reasonably well, it's great for those Wall Street "businessmen".
Pobre Apple