A former trader who bought approximately $1 billion in Apple stock without permission will spend two and a half years behind bars.
According to Reuters, David Miller -- a former trader for Stamford-based Rochdale Securities -- was sentenced by U.S. District Judge Robert Chatigny in Connecticut after being accused of fraudulently buying 1.625 million Apple shares.
The defendant conspired with another individual to buy the shares for roughly $1 billion, on the same day that Apple reported third-quarter earnings last year. The trader hoped that the tech giant's stock price would rise, allowing him and his co-conspirator to make a profit after orchestrating the scheme.
The second defendant's identity has not been revealed.
However, stock prices plummeted due to poor iPhone sales. Third quarter earnings were $8.8 billion, or $9.32 a share, on revenue on revenue of $35 billion -- which was a disappointment relative to investor expectations.
After the gamble failed, Miller told his financial services employer, Rochdale Securities, that a fictitious customer had only asked for 1,625 AAPL shares, worth $1 million. However, the former broker claimed that a mistake occurred to due to multiple copies of the same order being submitted. In an attempt to write off the loss, prosecutors said that Miller also defrauded another brokerage by convincing it to sell 500,000 Apple shares.
However, the damage was done, and Rochdale Security faced undercapitalization of $5.3 million -- after trading out the shares -- which eventually led to the company collapsing, according to filings from another suit involving the Securities and Exchange Commission.
The 41 year-old pleaded guilty seven months ago to wire fraud and conspiracy, and will now spend 30 months behind bars. The former trader could have been ordered to spend up to 20 years in prison. Miller's attorney Kenneth Murphy said:
"As we said on the day of his plea, this was a good and decent man who had led an otherwise exemplary life who acted out of desperation rather than greed. Judge Chatigny saw this to be the case and gave David a fair and reasonable sentence considering all these factors."