November 6, 2012 / 3:28 AM / 8 years ago

FINRA investigating Rochdale trades in Apple shares: WSJ

(Reuters) - An independent securities regulator is investigating alleged unauthorized trades in Apple Inc shares at Rochdale Securities LLC that have placed the brokerage in a financially shaky position, the Wall Street Journal reported.

A trader at Rochdale received an order for stock in Apple but bought 1,000 times the number of shares requested, the WSJ reported, citing a person familiar with the thinking of Rochdale executives. The Financial Industry Regulatory Authority is now investigating the trades, according to the WSJ.

The trader says the extra shares were ordered by mistake, according to the person, but Rochdale is alleging the actions were intentional. Rochdale suspects the trader was working with an outside party to execute the trade and profit at the firm’s expense, the WSJ said, without identifying the trader.

A trader bought $750 million to $1 billion in Apple shares last month without permission, and the stock later fell in value by a few million dollars, reducing Rochdale’s ability to weather losses, Bloomberg News reported, citing two unidentified people.

Rochdale is in advanced talks with potential investors to save the private brokerage, Bloomberg reported.

“The firm is recapitalizing and should be talking to the market shortly,” Daniel Crowley, Rochdale’s president, told the WSJ, declining to offer details on the trades or the probe.

As of December 31, 2011, Rochdale had $3.44 million in net capital, according to a filing with the U.S. Securities and Exchange Commission.

Rochdale and Apple could not immediately be reached for comment by Reuters outside regular U.S. business hours.

Stamford, Connecticut-based Rochdale provides brokerage services to institutional clients. Its equity research division employs prominent bank analyst Richard Bove.

Reporting by Sakthi Prasad; Editing by Ryan Woo

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