FBI arrests ex-Rochdale trader who imperiled firm

NEW YORK Wed Dec 5, 2012 3:29am IST

Stocks

   

NEW YORK (Reuters) - The FBI on Tuesday arrested David Miller, a former Rochdale Securities trader whose outsized, unauthorized purchases of Apple stock in October nearly sank his firm.

U.S. prosecutors in Connecticut charged Miller with wire fraud, alleging he lied about his trading of Apple (AAPL.O) shares ahead of the tech giant's October 25 earnings announcement.

According to a criminal complaint filed in federal court on Monday, Miller bought Apple shares for himself and then reported to Rochdale the trade was for a customer who would bear the risk if it lost money.

Miller would have been able to walk away with a profit for himself had Apple's share price risen, but it fell. As a result, Rochdale was left unexpectedly owning more than a million and a half shares of Apple and had to sell them for a $5 million loss.

According to the complaint, Miller also pretended to be a representative of a client's firm and told another broker-dealer to sell Apple shares, supposedly on behalf of the firm.

Miller's lawyer, Kenneth Murphy of Simon & Partners, did not immediately respond to a request for comment.

At the time, Miller told his superiors the purchases had been a fat finger error. Prosecutors, however, called it a "get-rich-quick scheme."

After the incident, Rochdale, a small Stamford-based brokerage that is home to the outspoken bank stock analyst Dick Bove, reached out to competitors for a potential life-saving investment, according to media reports.

Rochdale President Daniel Crowley could not immediately be reached for comment. The firm's main reception line at its Stamford headquarters rang unanswered just after 4 p.m. (2100 GMT) on Tuesday.

The case is USA v. David Miller, U.S. District Court, District of Connecticut.

(Reporting By Emily Flitter; Editing by Tim Dobbyn and Steve Orlofsky)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Monetary Policy

Monetary Policy

Fed renews zero rate pledge, but hints at steeper rate hike path.  Full Article 

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

E-Commerce

E-Commerce

Tiger Global leads $60 million investment in Quikr.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage