Miller also defrauded another broker-dealer into taking on a significant short position in Apple stock to hedge against the large purchase of Apple stock he was executing at Rochdale, authorities said.
It is understandable that hedge funds may be comparing Apple to Google, but AIG is a different story.
FORBES: Hedge Funds Love A Bailout Queen, AIG Dethrones Apple As Favorite Holding
Then, abruptly, the music stopped as the hedge funds who were supporting Apple into their fiscal year end on October 31st, began to bail out.
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During the last quarter ending June 30, Hedge Fund Wisdom reported that Apple was a consensus buy among the 25 elite funds it tracks in each quarterly issue.
Another firm, through which Miller shorted 500, 000 shares of Apple as a hedge, and ostensibly on behalf of a corporate client, was also put at risk of losses, but managed to exit those trades at a profit.
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Since 2010 hedge fund managers have feasted on Apple.
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The question now is, will Apple sink Einhorn and other hedge funds in 2013?
For most hedge fund managers, however, holdings in Apple simply mitigated some bad bets elsewhere in the portfolio.
Apple is the largest holding of hedge funds and other fast money traders.
For context, Apple may be running the largest hedge fund in the world.
Goldman Sachs, according to Reuters, says AIG has replaced Apple as the favorite pick of hedge funds.
FORBES: Hedge Funds Love A Bailout Queen, AIG Dethrones Apple As Favorite Holding
Streettalk even learned of one hedge fund in New England that ONLY trades Apple all day long, and is even by days end.
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This kind of record trading volume plus volatility can only have been the result of extraordinary high frequency trading by computer and the quant hedge funds, going in and out of Apple and IBM and big bank shares dozens of times a day.
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Greenlight Capital, the hedge fund run by Mr. Einhorn, applauded Apple's cash plans in a statement Tuesday.
Hedge fund manager David Einhorn has led calls for Apple to boost the return earned by shareholders, which he complains is dragged down by the low income the company earns on its cash hoard.
This suggests that Apple is either the largest or second largest hedge fund in the world, with tremendous investment return potential.
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Once hedge funds and other investors began dumping the shares after Apple reported a few quarters of mildly disappointing results, downside momentum picked up and overall sentiment changed rather dramatically.
Forget all of the smoke that hedge fund manager David Einhorn is blowing right now about Apple and its proposal to eliminate its ability to issue preferred stock.
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The down side for Apple is that if Einhorn and other big hedge fund holders lose faith in the company as a timely investment, its share price might sink even further.
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Apple used to be the most popular stock among hedge funds.
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Greenlight Capital, a hedge fund run by Wall Street maverick David Einhorn, sued Apple over the proposal because it would remove the board's ability to issue preferred stock without shareholder authorization.
Einhorn, whose hedge fund Greenlight Capital held 1.1 million shares of Apple as of September 30, told CNBC Thursday he thinks Apple can borrow at very low interest rates, which would enable it to pay richer dividends on preferred shares without touching its cash hoard.
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Shareholders of Apple are, in effect, investors in the largest hedge fund in the world with absolutely no idea what they are invested in.
FORBES: Apple Cash, Margins And Innovation: The Obvious Strategy
Apple (AAPL) was the most widely held stock among hedge funds and mutual funds in the second quarter.
But Google remains the second most important stock in fundamentals-driven hedge funds, given only slightly less weight than No. 1 favorite Apple, according to a Goldman Sachs ( GS) reports.
Tiring of the Big Apple, Gilani moved to Florida in 1999 and started another hedge fund and opened a brokerage firm focused on direct access trading of what would soon morph into high frequency algorithms, many of which he designed and still uses.
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The war chest has become a target for activist hedge fund manager David Einhorn, whose Greenlight Capital owns a slug of Apple shares and has pushed the company to issue preferred shares with a fatter yield than the 2.5% on its common stock.
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Hedge fund manager David Einhorn says there is a corporate equivalent today: Apple.
FORBES: Einhorn Says Apple Needs To Lose The Steve Jobs 'Depression Mentality' On Cash
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