Former Rochdale Securities trader David Miller has plead guilty to wire fraud and conspiracy charges in connection with his unauthorized purchase of approximately $1 billion in Apple Inc. (NASDAQ:AAPL) stock. The fraud ended up causing the end of Rochdale Securities, which essentially shut down in November.
Reuters reports today that Miller entered his plea in a Connecticut courtroom on Monday. He faces up to 25 years in prison, although his sentence could be reduced to between five and eight years if a plea agreement is reached. His sentencing is set for July 8. The Securities and Exchange Commission has also filed a civil lawsuit against Miller in connection with the criminal case.
The fraudulent trade of approximately 1.6 million shares of Apple Inc. (NASDAQ:AAPL) happened on Oct. 25, which was the day the company was scheduled to report its third quarter results. Investigators said Miller told Rochdale he made the trade on behalf of a customer who actually ordered only 1,625 shares.
Miller was hoping to turn a profit if the company’s stock price rose after the earnings report, but it declined instead. That left Rochdale under-capitalized according to the SEC. Prosecutors also said Miller defrauded another brokerage by convincing it to sell half a million shares of Apple Inc. (NASDAQ:AAPL) as a partial hedge against the purchase he made.
Rochdale Securities has not been named as a defendant in any of the cases and has not been accused of any wrongdoing.