Unsanctioned Apple trade threatens Conn. brokerage

A small Connecticut brokerage firm is fighting for survival after one of its former traders made unauthorized trades in shares of Apple.

Rochdale Securities, which is known for employing banking analyst Dick Bove, is in negotiations to sell itself or receive a cash infusion from outside investors, said someone with direct knowledge of the talks.

Late last month, a trader at Rochdale purchased about $1 billion of Apple stock without permission, said this person, who requested anonymity because he was not authorized to discuss the matter. After the trader bought the shares, Apple — a notoriously volatile stock — dropped in value, costing Rochdale several million dollars. The trader is said to have intended to buy 165,000 Apple shares, but the order got executed at 1.65 million shares.


The Rochdale employee who made the Apple trades is David Miller, according to this person. After placing the trade, Miller shut down his computer and left the trading floor. He has not returned to the firm, said this person. Miller could not be reached for comment.

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The losses crippled Rochdale, a small firm with only about $3.5 million in capital. The firm does not tend to make trades with its own capital, which made the Apple trade even more out of the ordinary.

Last weekend, Daniel Crowley, the president of Rochdale, told media that the rogue trade had left his firm in a ‘‘negative capital position.’’

On Tuesday, Crowley said in an interview that his firm was ‘‘the victim of an unauthorized trade’’ and was cooperating with all regulators. He confirmed that the firm was in recapitalization talks.

The firm, which was started in 1975, employs about 60 traders and research analysts. Bove, a well-known bank analyst, is based in Florida.


Rochdale executives have been cooperating with various securities regulators, including the Financial Industry Regulatory Authority and the Securities and Exchange Commission.

Miller, a journeyman Wall Street trader, had worked at Rochdale since 2009, according to securities filings. Previously, he did stints at small New York broker-dealers, including Ladenberg Thalman; Punk, Ziegel & Co.; and M.H. Meyerson.

Rochdale’s case is the latest in a series of trading blunders that have rattled Wall Street. In August, an errant trading algorithm nearly brought down Knight Capital Group. There have been other prominent cases involving problematic trades, from the botched Facebook initial public offering this year to a case involving a rogue trader at UBS who is said to have cost the firm $2.3 billion.