A trader has been accused of purchasing $1 billion Apple shares on 26 October - the day the company announced its financial results for the September quarter.

The purchase cost his employer $5 million.

David Miller, who was employed as a sales trader by Rochdale Securities in Stamford, Connecticut, bought 1.6 million AAPL shares on 26 October. According to prosecutors the scheme was designed so Miller would profit if the stock price rose, but it declined.

Miller claimed that he had made a mistake and ordered many multiples of what was written in a client's order. The authorities claim this is untrue.

Miller then duped another broker into taking a short position in Apple stock, according to the prosecution. That dealer sold 500,000 AAPL shares while falsely claiming that he was trading for a company with which he had no relationship, according to the prosecution.

When Rochdale realized what had happened it traded out of the stock, and suffered losses of $5 million, according to an NBC report.

Miller could face 20 years in prison if convicted.

It is typical for Apple's share price to decline following a financial results announcement, and many anticipated that the results for the September quarter would not prove favourable due to the lack of the iPhone 5 in the quarter.

Since October Apple's stock has taken a nosedive, although it has recently recovered some ground. AAPL surpassed $700 in late September, fell to $537.75 on 8 November, and closed last night at $575.85. One reason for the apparent sell of and decline is thought to be driven by the looming fiscal cliff, specifically the expiration in January of tax cuts.

Follow Karen Haslam on Twitter / Follow MacworldUK on Twitter  


Apple investors back on track after Obama calls Apple's Tim Cook

Apple share price decline due to fiscal cliff and capital gains tax hike

Apple price declines on news of 5 million iPhone 5 sales, supply can't meet demand, say analysts

Apple at $577: a good buy or a good bye?

Anomaly in Apple's fourth quarter hides expectation beating results