Finra to investigate Rochdale Securities over unauthorised Apple trade (Photo: Reuters)
Finra to investigate Rochdale Securities over unauthorised Apple trade (Photo: Reuters)

The Financial Industry Regulatory Authority (Finra) is investigating a series of unauthorised trades in Apple shares at Rochdale Securities that has left the brokerage scrambling for core capital to survive.

According to the Wall Street Journal, the securities watchdog is looking into a trader at Rochdale that received an order for Apple shares from a client but bought 1,000 times the number requested - instead purchasing between $750m to $1bn worth of Apple stock.

Citing unnamed sources, the WSJ report says that the trader in question ordered the stocks "by mistake". Rochdale executives insist that the shares were bought intentionally and without permission.

A number of media reports say that the alleged rogue trader bought the Apple shares around the time of the technology company's 25 October earnings report. When Apple's third-quarter earnings trailed analysts' estimates, the shares fell, declining more than 5 percent from the day of the report until the close of trading on Friday 2 November, the day before the position was discovered.

Rochdale President Daniel Crowley said in a statement on Sunday that his firm "had an unauthorized trade that left us with a negative capital position. We are in talks that would result in a healthy balance sheet, and we expect to be trading maybe as early as Monday. The firm is recapitalizing and should be talking to the market shortly."

Since then, Bloomberg has reported that the brokerage, which hires prominent bank analyst Richard Bove, is in advanced talks with potential investors to save the firm.

According to US Securities and Exchange Commission data, Rochdale had $3.44m in capital at the end of 2011.

Rochdale's Crowley and representatives from Finra were not immediately available to comment when contacted by IBTimes UK.

Finra is the US's largest independent regulator of securities firms, according to its website , and is "dedicated to investor protection and market integrity through effective and efficient regulation".