A trader who thought that Apple was a safe bet faces 25 years in prison.
According to Reuters, David Miller, 40, who worked for Rochdale Securities, thought that Apple’s shareprice would go up after October 25, 2012.
Apple planned to report third-quarter results and Miller thought the company was going to release some stonking profits. After all, it had done in the past, and the buzz was that it would this time too.
Miller bought 1.625 million Apple shares and told Rochdale that the trade was for a customer that had in fact ordered just 1,625 shares.
The bet backfired when Apple shocked fans by saying it had not done as well as it expected. This left Rochdale on the hook for $5.3 million of losses on the extra 1,623,375 shares. The company was suddenly undercapitalised.
Miller made matters worse by defrauding another brokerage by inducing it to sell 500,000 Apple shares, hoping to partially hedge against the purchase he had made at Rochdale.
He pleaded guilty to wire fraud and conspiracy and could go down for 25 years.
Under a plea agreement he could receive a term of five to eight years and is currently free on bond.
Miller's lawyer, Kenneth Murphy, said that the event was out of character for a kind and generous family man who has lived an otherwise law-abiding and good life.
Miller deeply regrets what he has done and the harm it has caused to other people, including the former principals and employees at Rochdale.
His old company Rochdale ceased operations and its staff left or were fired in November 2012.