U.S. charges former top Apple lawyer with insider trading

“The former top corporate lawyer at Apple Inc was criminally charged by the U.S. Department of Justice on Wednesday with insider trading ahead of six of the iPhone maker’s quarterly earnings announcements,” Jonathan Stempel reports for Reuters. “Authorities said Gene Levoff exploited his positions as corporate secretary, head of corporate law and co-chairman of a committee that reviewed draft copies of Apple’s financial results to trade illegally between 2011 and 2016. Prosecutors said Levoff, 45, of San Carlos, California, generated $604,000 in illegal gains, including realized profit and avoided losses, before Apple terminated his decade-long employment in September.”

“Levoff faces one count of securities fraud, carrying a maximum 20-year prison term and a $5 million fine,” Stempel reports. “‘Levoff’s alleged exploitation of his access to Apple’s financial information was particularly egregious given his responsibility for implementing the company’s insider trading compliance policy,’ Antonia Chion, associate director of the SEC’s enforcement division, said in a statement.”

“As co-chairman of Apple’s disclosure committee, Levoff helped Chief Executive Officer Tim Cook and his predecessor, Steve Jobs, ensure the timeliness, accuracy and proper oversight of company disclosures, including financial results, according to authorities,” Stempel reports. “Despite this, prosecutors said Levoff bought and sold more than $14 million of Apple stock, including $10 million in July 2015 alone, after being given draft earnings materials but before the results were made public. Authorities said Levoff knew or should have known he was breaking the law, citing a February 2011 email where he warned employees not to trade on material nonpublic information.”

Read more in the full article here.

MacDailyNews Take: If found guilty, prosecute him to the fullest extent of the law.

11 Comments

  1. Perhaps he should have run for a seat in the house of representatives or the senate where insider trading is legal, then he wouldn’t be looking at possible jail time he would be getting congratulatory pats on the back and preparing for re-election.
    WTF is wrong with this country?

    1. I guess he got tired of trying to guess what Tim Cook would do next, lol. You gotta admit, AAPL can easily wipe out a third of its value. Cook managed to do it a couple times. Any edge he could get he obviously pounced right on it.

    2. Exactly right; Congress gives itself privileges and protections that it vindictively refuses to write into laws that apply to others. But this prosecution is a very, very rare event; Normally the police state is satisfied with going after criminals who are easy to arrest instead or those who democratically challenge its authority in some way.

  2. The only problem I can see with the prosecution theory behind this indictment is there does not seem to be any correlation between release of Apple’s quarterly financial statements and whether AAPL stock prices will rise or fall in the days following that release. Often goodnews is met with a resounding “Meh,” a surprising drop in prices, or a decided increase, depending on what some ignorant analysts might be claiming on the days leading up to the Financial Data release, one Anal-cysts’s totally ignorant column published on the day of the conference call mis-citing the Street expectations, or the news of another tech company’s news.

    Apple has TWICE reported the best, record breaking, highest profit and revenue quarters in business history, not just Apple history but of EVERY business everywhere, in any time, and the market value of Apple’s stock DROPPED, because nay-sayers said it either wasn’t good enough, or Apple won’t be able to keep going on at this pace and must falter because of whatever, or the next quarter will not be bigger! Any reason was good enough to bad-mouth the results. However, the point is there is NO RATIONAL WAY TO TRADE AAPL ON INSIDER KNOWLEDGE DUE TO THIS IRRATIONAL STOCK MARKET VOLATILITY!

    1. You forget the old adage, “Buy on rumor, sell on facts.”

      He knew about results long before they were public and often before the rumors started.

      What has often happened with AAPL over the past 20+ years is one or more rumors start with regard to Apple’s earnings. Then the stock (AAPL) starts to go up. Then Apple reports official results and AAPL takes a hit. If you knew before the rumors got hot and heavy you could buy before the uptick and sell right before the official announcement. Or you could short the stock right before the official announcement.

      There are many ways he could have played the market with insider knowledge, but at this time and from this article there is no way to know for certain which way he supposedly did it.

    2. The offence isn’t “insider profit making”, it’s “insider trading”.

      Levoff used insider information gained from his very senior position within Apple to try and gain an advantage while trading. It’s irrelevant how he traded, whether it was a risky trade, or whether he made a killing, or come to that whether he made a loss. As it happens, he made more than $600,000.

      Exploiting insider information in this way is a serious offence and he can’t possibly claim ignorance of the law because he sent an e-mail to staff in 2011 warning them not to trade using insider information.

      He appears to have traded using insider information for about five years, so he couldn’t possibly claim that it was a one-off mistake. He is alleged to have traded more $10 million in just one month and $14 million altogether. That’s a pretty big operation by any standards.

  3. In Merica you are “innocent until proven broke.”

    The verdict will be not guilty or more likely a plea bargain with a fine less than the 600K he stole and a suspended sentence.

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