40-year-old David Miller, of Connecticut, is facing fraud charges in an Apple stock scheme that involved him profiting from a $1 Billion (€763 Million) transaction.
A former trader with Rochdale Securities, Miller tried to benefit from Apple announcing its fourth-quarter results on October 25. He purchased a large number of shares, without authorization from company owners or his client.
When said client ordered 1,625 Apple shares, he bought 1,625 million instead. He purchased the stocks throughout the day, but later claimed he ordered them by mistake.
In the days before the end of the quarter, he announced he would be leaving Rochdale. He enlisted the services of a separate brokerage company to administer the hedge fund.
On October 25, he asked them to sell off 500,000 Apple shares. The next day, when the price of the stocks declined, he traded out of the positions.
US attorney for the District of Connecticut Fein explains that his scheme didn't work, and it left Rochdale with the millions of shares, and incurring a major loss.
"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," David Fein's statement reads, according to a report by CNBC.
"The scheme was designed to generate profits by trading out of the position after Apple announced its earnings later that day. But after Apple's earnings announcement, the stock price fell," he adds.
Miller turned himself in to the FBI in Bridgeport, and will be tried for his action. A US federal judge in Connecticut allowed him to be released on $300,000 (€230,000) bond, which he posted.
He is accused of defrauding not only Rochdale, but also the other broker, whose name has not been made public. If convicted, he faces 20 years in prison.