By Philip Elmer-DeWitt
December 5, 2012

FORTUNE — It must have seemed like a sure thing.

According to a federal criminal complaint filed Tuesday, David Miller thought he’d make a quick killing in Apple (AAPL) on Thursday, Oct. 25 — the day the company reported its fourth quarter earnings — by pretending to misplace a decimal point on a client’s order.

The client had asked Miller to buy 1,625 shares of Apple — worth about $1 million at the opening price of $620 a share. Instead, Miller bought 1.625 million Apple shares — a billion dollars worth — allegedly assuring his firm, Rochdale Securities, that the client was good for the money and would assume the risk.

Miller’s plan, according to the complaint, was that Apple would beat the Street’s estimates, the stock would soar, and he would pocket the difference between his client’s profits and the gains from the 1,000-fold larger trade.

Unfortunately for Miller, Apple disappointed Wall Street that day, falling short of analysts’ earnings expectations and offering surprisingly conservative margin guidance. Instead of soaring, the stock fell. It closed the next day at $601.25, down $18.75 (3%) from Thursday’s opening price.

On paper, those 1.6 million Apple shares were worth about $30 million less than what Miller paid for them.

According to the U.S. attorney for the District of Connecticut, Miller had hedged his bet somewhat by arranging for another brokerage house to short 500,000 shares of Apple — a trade that firm was able to close at a profit.

But it was not enough to save Miller or Rochdale Securities, which was left holding a bag bigger than its cash cushion. The 47-year-old Stamford, CT-based firm best known these days for employing Dick Bove, a TV-friendly bank analyst, has been searching ever since for a white knight to buy it out.

“As is so often seen in these types of cases, the alleged criminal conduct of Miller was for personal gain at the expense and detriment of others,” FBI agent Kimberly Mertz said yesterday in a statement. “Manipulating and orchestrating stock transactions in such a manner is a very serious criminal offense and its impact can be both devastating and lasting.”

Miller was charged with wire fraud, which carries a maximum penalty of 20 years. He was released after posting a $300,000 bond.

Meanwhile you have to wonder how often this kind of thing happens, and whether it would have come to light if Rochdale had been able to cover the losses.

The case is U.S. v. Miller, 3:12-mj-288, U.S. District Court, District of Connecticut (Bridgeport).

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