U.S. authorities have settled with an institutional trader whose rogue trading scheme ultimately sank his firm.

The U.S. Securities and Exchange Commission (SEC) said today that it charged an institutional trader, David Miller, at a Connecticut-based brokerage firm, Rochdale Securities LLC, over a rogue trading scheme that put the firm out of business. The SEC reports that Miller has agreed to a partial settlement of its charges, and he also pleaded guilty in a parallel criminal case.

The SEC alleges that Miller purposely planned to enter a massive order in Apple stock (Nasdaq:AAPL), participating in any profit, and, if the scheme failed, claiming that it was an erroneous order. It says that he misrepresented to Rochdale Securities that a customer had authorized orders and assumed the risk of the trades. While the order was to purchase just 1,625 shares of Apple stock, the commission says that Miller instead entered a series of orders totaling 1.625 million shares at a cost of almost US$1 billion.

It says that, as it happened, the stock price decreased after the firm’s earnings announcement, and Rochdale lost approximately US$5.3 million, causing the value of the firm’s available liquid assets to fall below regulatory limits required of broker-dealers. It was forced to cease operations in the wake of covering the losses suffered from the rogue trades.

To settle the SEC’s charges, Miller will be barred in separate SEC administrative proceedings from working in the securities industry or participating in any offering of penny stock. In the partial settlement in court, Miller agreed to be enjoined from future violations of the antifraud provisions of the federal securities laws. A financial penalty will be determined at a later date by the court upon the SEC’s motion.

Additionally, in a criminal proceeding, Miller pled guilty to charges of wire fraud and conspiracy to commit securities and wire fraud. He will be sentenced on July 8.

“Miller’s scheme was deliberate, brazen, and ultimately ill-conceived,” said Daniel Hawke, chief of the SEC enforcement division’s market abuse unit. “This is a wake-up call to the brokerage industry that the unchecked conduct of even a single individual in a position of trust can pose grave risks to a firm and potentially to the markets and investors.”