Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nasdaq  >  Apple Inc.    AAPL

APPLE INC. (AAPL)

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Apple Inc. : 3RD UPDATE : Former Rochdale Trader Arrested, Charged for Wire Fraud

share with twitter share with LinkedIn share with facebook
share via e-mail
0
12/05/2012 | 12:54am CEST

(Updates with background and details throughout)

By Alexandra Scaggs and Ben Fox Rubin

Former Rochdale Securities LLC trader David Miller was charged Tuesday by the U.S. attorney's office with wire fraud for an alleged unauthorized trade in Apple Inc. (AAPL) shares that left the brokerage scrambling for a rescue.

The former trader, Mr. Miller, 40 years old, of Rockville Centre, N.Y., allegedly arranged a purchase of about $1 billion worth of Apple stock in a scheme that backfired when the company's stock fell after disappointing earnings, according to a criminal complaint from the U.S. Attorney for the District of Connecticut. The firm lost about $5 million as a result, the complaint said, which was more than it had in capital.

Mr. Miller's lawyer, Kenneth Murphy of Simon & Partners LP, declined to comment.

Stamford, Conn.-based Rochdale, best known for employing bank analyst Richard Bove, has been looking for a rescuer to shore up its balance sheet since the Oct. 25 trade left it in what President Daniel Crowley called "a negative capital position." As of the end of 2011, the firm had $3.4 million in capital, according to a filing with the Securities and Exchange Commission.

Mr. Miller surrendered to the Federal Bureau of Investigation on Tuesday in Bridgeport, Conn., and was later released on a $300,000 bond. An FBI spokesman said the bureau had no further comment.

Mr. Crowley declined to comment on the charges Tuesday. He has said Rochdale is in talks with multiple firms about a potential buyout or capital infusion. Mr. Bove said last week he would remain with the firm "until the last shot is fired."

Mr. Miller, who the criminal complaint described as a "marginally profitable trader," allegedly schemed to defraud Rochdale by buying 1.625 million shares of stock in Apple on the day the tech firm was scheduled to announce its quarterly earnings. The scheme was designed so that Mr. Miller would profit if the stock price rose after Apple announced its earnings, the complaint said.

But Apple's earnings missed Wall Street expectations and shares fell 0.9% the following day. An Apple spokeswoman said last month the company doesn't comment on trading in its shares.

Mr. Miller told Rochdale he was executing a customer order, but the "scheme was designed so that Rochdale...would bear the risk of loss if Apple's stock price dropped," the complaint said. When the stock price declined after the earnings report, Rochdale's customer said it had only ordered 1,625 shares of Apple, according to the complaint. Mr. Miller said he had made a mistake in ordering many multiples of what was written in a client's order, according to the complaint.

Mr. Miller also allegedly told a second brokerage, which wasn't named in court papers, that he worked for a third firm and told the brokerage to contact what the complaint described as "non-existent persons" at the third firm to open accounts.

Mr. Miller put in a trade shorting Apple shares--or selling stock he didn't own--through the second brokerage, allegedly on the third firm's behalf. Investors who sell stock short hope the share price declines and aim to profit later by buying stock back at a cheaper price.

After the short trade was executed, the second brokerage tried to contact the names provided at the third firm but "learned no one by those names worked there," the complaint said.

As a result, the second brokerage was allegedly left with a short position of about 500,000 shares of Apple. The brokerage was able to trade out of the position at a profit when Apple shares fell, according to the complaint.

The chief financial officer of the third firm told the FBI agent investigating the incident that Mr. Miller "did not work for [the firm], did not have a job offer with [the firm], and was never authorized to trade on its behalf." He also said the contact names provided were "phony."

Rochdale has been unable to trade securities or issue stock research since shortly after the billion-dollar trade, because of its cash shortfall. During the weeks in which Mr. Crowley has sought aid for the firm, its trading ranks have thinned.

Traders would be particularly hard-hit by the restrictions, as much of their income is made on commission. According to data from the Financial Industry Regulatory Authority, at least 14 Rochdale employees have deregistered with the firm since the unauthorized trade, including the co-heads of its trading operations.

Write to Alexandra Scaggs at [email protected] and Ben Fox Rubin at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on APPLE INC.
10:22a APPLE : Echo Competitor Rumors, News, Release Date, Price
05/24 APPLE INC. (NASDAQ : AAPL) Files An 8-K Other Events
05/24 APPLE INC : Other Events, Financial Statements and Exhibits (form 8-K)
05/24 APPLE : To Convince Android Users To Switch To iPhone
05/24 APPLE : iPhone 9 akan memiliki skrin paparan OLED 5.28-inci dan 6.46-inci
05/24 MICROSOFT : launches new Surface Pro like Apple, with an edge
05/24 APPLE : launches app development curriculum for students
05/24 APPLE : Launches App Development Curriculum for High School & Community College ..
05/24DJAPPLE : Agrees to Pay Nokia in Patent Fight -- WSJ
05/23 MARKETS RIGHT NOW : US stocks post their 4th gain in a row
More news
Sector news : Computer Hardware - NEC
11:17aDJLENOVO : China's Lenovo Reboots After Losing PC Crown to HP
10:04a LENOVO : China's Lenovo returns to profit as PC performance beats overall market
09:21a LENOVO : China's Lenovo says will not phase out its own phone brand
06:56aDJLENOVO : 4Q Net Profit Down 41% to US$107 Million
12:23a HP : results beat in 'breakthrough' quarter for PC, printers
More sector news : Computer Hardware - NEC
News from SeekingAlpha
04:12a Tracking Larry Robbins's Glenview Capital Management Portfolio - Q1 2017 Upda..
05/24 SoftBank's Vote Of Confidence In Nvidia
05/24 Don't Blame Minsky If Your Portfolio Value Crumbles
05/24 Going Long With W.G. - Exclusive Research From WG Investment Research
05/24 SOUTHWEST AIRLINES : The Best Buyback In The S&P 500
Advertisement
Financials ($)
Sales 2017 226 904 M
EBIT 2017 60 601 M
Net income 2017 46 767 M
Finance 2017 164 970 M
Yield 2017 1,54%
P/E ratio 2017 17,18
P/E ratio 2018 14,76
EV / Sales 2017 2,80x
EV / Sales 2018 2,44x
Capitalization 799 490 M
More Financials
Chart APPLE INC.
Duration : Period :
Apple Inc. Technical Analysis Chart | AAPL | US0378331005 | 4-Traders
Full-screen chart
Technical analysis trends APPLE INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 48
Average target price 154 $
Spread / Average Target 0,43%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Timothy Donald Cook Chief Executive Officer & Director
Arthur D. Levinson Chairman
Jeffrey E. Williams Chief Operating Officer
Luca Maestri Chief Financial Officer & Senior Vice President
Kevin M. Lynch Vice President-Technology
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
APPLE INC.32.79%802 879
HP INC27.76%32 311
HEWLETT PACKARD ENTERP..-18.28%31 148
SEAGATE TECHNOLOGY PLC11.95%12 687
PEGATRON CORPORATION--.--%7 939
LENOVO GROUP LIMITED3.18%7 079
More Results