Rochdale Looking for a Rescue After Bad AAPL Trades?

According to this story in Bloomberg, yes.

This is the firm that employs legendary banking analyst, Dick Bove.

Apparently the story line is that unauthorized trades in AAPL around the time of the Oct. 25th earnings in the amount of $750 mn to $1 bn went south and now Rochdale looks to ned a rescue.

There are a few things that don't add up. I can see why someone might buy AAPL before earnings as they (at least when Steve Jobs was still there) always put out low ball guidance and always blew away consensus, that hasn't been the case lately. I don't understand why the incident is being investigated by the FBI, SEC, FINRA, and who knows who else, when it "seems" to be an in house lack of discipline.

From the article...

"The Apple trade is the focus of an FBI investigation as an “alleged market-manipulation scheme,” the New York Post reported, without saying where it got the information. The newspaper said the U.S. Securities and Exchange Administration and the Financial Industry Regulatory Authority joined the investigation."

Market manipulation scheme? How does this story go from rogue trader which is nonsense to market manipulation? 

According to the article, in a regulatory filing the company had $3.44 mn in cash at the end of last year, there's not a lot of room for error there.

Here's what else is bothering me, the firm's risk management department, unless they don't have one, but even if that be the case, the accountant or someone has to be responsible for squaring up positions with the clearing house, how in the world could this trade have lasted more than a partial day without someone noticing and with that little cushion, what would a trader be doing buying that much AAPL before earnings? 

Something stinks about this mess, the hedge fund I met with earlier this year was much smaller and had 100% knowledge of every dollar that the firm saw that day, I just don't buy this rogue trader.

In any case, I guess smart money isn't always so smart, but what I'd really like to know is why the FBI is involved and who broke out the cattle prod to get the SEC involved?