Apple Inc. (NASDAQ:AAPL) shares have always been attractive to investors and traders, and the same fondness has landed a former trader in prison. On Tuesday, David Miller was sentenced to 2 1/2 years in prison for carrying out an illegal purchase of Apple’s stock worth $1 billion, according to a report from Reuters.
According to prosecutors, Miller acquired 1.625 million Apple shares on October 25, 2012, which happens to be the same date the iPhone maker announced its third quarter earnings. Miller, of Rockville Center, New York, had one or more accomplices, whose identity has not been revealed in court papers.
Miller duped another brokerage house into selling 500,000 Apple Inc. (NASDAQ:AAPL) shares as a hedge against shares he acquired at Rochdale, according to prosecutors. The brokerage house has not been named in the court papers, but it did make a profit from the transaction, according to prosecutors.
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Rochdale suffered the most
The sentence was handed down by the U.S. District Judge Robert Chatigny in Hartford, Connecticut, seven months after the former trader pleaded guilty to fraudulent tactics used, which resulted in the closing of financial services firm Rochdale Securities.
Miller, 41, who was only authorized to buy 1,625 shares, acquired 1.625 million Apple Inc. (NASDAQ:AAPL) shares, hiding real facts from his employer Rochdale by saying that the trade was for a customer. However, when the bet failed, Rochdale suffered losses to the tune of $5.3 million on the additional unauthorized shares, according to a related lawsuit filed against Miller by the U.S. Securities and Exchange Commission (SEC).
The losses made the firm undercapitalized, which eventually resulted in the collapse of Rochdale. The Stamford-based Rochdale has not been accused of any wrongdoing in either case.
Kenneth Murphy, attorney for Miller, said that the former trader could have been given 20 years in prison. 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.”