One year after taking down his entire brokerage firm through a scheme that the SEC labeled as "deliberate, brazen, and ultimately ill-conceived," former trader David Miller was sentenced to 2 1/2 years in prison. Miller pleaded guilty in April 2013 to charges of wire fraud and conspiracy to commit wire and securities fraud.

As I previously discussed here, on October 25, 2012, Miller allegedly engaged in a series of "rogue" trades in Apple stock on the day that Apple announced its quarterly earnings. Although Miller's customer placed an order to purchase just 1,625 shares of Apple stock, Miller instead ordered the purchase of a total 1.625 million shares. His plan, the government alleged, was that he would share in the customer's profit from the sale of the 1.625 million shares if Apple's stock price increased following the earnings announcement later, and he would falsely claim that he had misinterpreted the size of the customer's order if the price went down (and let his employer, Rochdale Securities LLC, absorb the losses).

Alas, Apple stock did fall following the earnings announcement, and Rochdale was forced to take responsibility for a $5.3 million loss that ultimately led to it having to withdraw its registration with the SEC and cease operations.

Today, Bloomberg reports, U.S. District Judge Robert N. Chatigny sentenced Miller to 2 1/2 years in prison. Miller's attorney, Kenneth C. Murphy, said Miller was "a good and decent man who had led an otherwise exemplary life who acted out of desperation rather than greed. Judge Chatigny saw this to be the case and gave David a fair and reasonable sentence considering all these factors."

Topics