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Apple, a ‘rogue trader’, and a billion dollar bet turned sour

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06/11/2012
An alleged rogue trade in US technology giant Apple's shares has left a US brokerage fighting for survival.

According to reports, Rochdale Securities – based in Connecticut – has been left with a “negative capital position” after a trader at the company bought up to $1bn worth of Apple shares around the time of the tech firm’s recent results.

The Wall Street Journal reports US securities watchdog Finra (the Financial Industry Regulatory Authority) is looking into a trader at Rochdale who received an order for Apple shares from a client, but bought 1,000 times the number requested – purchasing between $750m and $1bn worth of Apple stock.

Since the company’s Q3 results on 25 October, Apple’s share price has fallen 5% from $614 to $584.

The iPhone and iPad maker reported profits in Q3 were $8.2bn (£5bn), up from $6.6bn in 2011, with revenues of $36bn, up 27%.

Apple sold 26.9 million iPhones in the quarter to 29 September, higher than forecast, and 14 million iPads.

However, profits missed analysts’ forecasts, prompting investors to take profits from a stock some have tipped to reach a $1,000 a share.

Rochdale itself has called the trades “unauthorised” adding it has since held talks with two companies about a possible capital injection.

“Rochdale had an unauthorised trade that left us with a negative capital position. We are in talks that would result in a healthy balance sheet,” company president Daniel Crowley is reported to have said.

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