Morgan Stanley agreed to pay a $4 million fine on Wednesday after the Securities and Exchange Commission penalized the firm for violating a market access rule when a rogue trader engaged in fraudulent trading of Apple Inc. stock. Morgan Stanley “failed to uphold credit limits for a customer firm” when a rogue trader who worked at Rochdale Securities LLC routed to Morgan Stanley’s electronic trading desk a series of orders to purchase the tech giant's stock on Oct. 25, 2012, the SEC said.

“Broker-dealers become important gatekeepers when they provide customers direct access to our securities markets, and in this case Morgan Stanley did not live up to that responsibility,” Andrew Ceresney, director of the SEC enforcement division, said in a statement. “Morgan Stanley failed to have reasonable controls in place to mitigate the risks associated with granting market access to a customer.”

The rogue trader at Rochdale had intentionally enlarged the amount of Apple stock an actual customer wanted to purchase from 1,625 shares to 1,625,000 shares and was using these orders to commit fraud, according to the SEC. The trader’s scheme was to personally profit from the excess shares if Apple’s stock price increased; however, Apple’s stock price began dropping later that day, and the trader falsely claimed that he had made a mistake in placing the order. Rochdale suffered a $5.3 million loss from the unauthorized purchase and ceased all business operations last year.

Following the announcement, shares of Morgan Stanley edged down 0.45 percent on Wednesday, to $37.94, on the New York Stock Exchange. Apple's stock fell 0.62 percent, to $113.42 per share, on the Nasdaq.