Former Rochedale Securities trader David Miller has entered a guilty plea in the U.S. Federal Court case charging him with wire fraud and conspiracy. Mr. Miller tried to game the system by using a client buy request to purchase about $1 billion in Apple stock for his own profit, but the scheme fell apart when it dropped instead of climbing as he expected.
Federal agents arrested Mr. Miller last year after made an unauthorized purchase of 1.625 million shares of Apple stock when a client actually requested 1,625 shares. He made the purchase the same day Apple was announcing its fourth fiscal quarter earnings, and he expected the stock to rise in after hours trading where he could sell it and pocket the profit, but instead it dropped on lower than expected iPad sales figures.
When Apple's stock dropped, Rochedale Securities was left holding the bill for about US$1 billion. The company wasn't prepared for the $5 million loss it suffered and ultimately had to shut down.
Federal prosecutors said at the time of Mr. Miller's arrest, "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."
Mr. Miller was facing up to 25 years in prison, but by agreeing to a guilty plea he will most likely serve between five and eight years instead, according to Reuters.
"What happened here was out of character for a kind and generous family man who has lived an otherwise law-abiding and good life," his attorney said.
Mr. Miller is scheduled for a sentencing hearing on July 8.