Stock trader David Miller, formerly of Rochdale Securities, was sentenced to 30 months in prison for his role in a failed stock trade that cost him his reputation and put the stock brokerage where he worked out of business.
The story begins on October 25, 2012 when Apple was preparing to announce its quarterly earnings. On that day, Miller bought 1.6 million shares of Apple (APPL) using money from his firm. He was buying the stock for a phony customer who placed an order for 1600 shares. Miller purposely bought 1,000 times the order so he could blame a clerical error in case things went awry.
If all went according to plan, Miller was going to sell the stock in after hours trading and make a sizable sum when Apple’s stock spiked after a favorable earnings report. The money he planned to make would be used to pay off his growing personal debt.
Things didn’t go as expected and Apple’s stock fell, leaving his firm holding the bag. The firm was able to recoup most of the money, but not enough of it to stay solvent. When all was said and done, Rochdale was $5 million in debt and was forced to shut down.
“A single act of greed shattered everything that had been worked on for 37 years,” said Carl Acebes to The Hartford Courant. Acebes founded Rochdale with a loan from his father
Miller was sentenced on Tuesday in the U.S District Court in Hartford. When his prison sentence is over, Miller will be required to reimburse Rochdale for its losses.
[Via Reuters]
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