U.S. prosecutors told a federal judge in New Jersey this week that former Apple lawyer Gene Levoff is making a bogus “Hail Mary” argument that insider-trading charges against him are unconstitutional.
Chris Dolmetsch for Bloomberg:
Gene Levoff, previously a senior in-house lawyer specializing in corporate law for Apple, was charged last year with trading on inside information about the company’s revenue and earnings dating back to 2011. He asked U.S. District Judge William Martini in Newark last month to throw out the indictment against him, arguing that the prosecution is unconstitutional because no specific criminal law bars such conduct.
“The definition of insider trading is wholly judge-made: Every element of the crime and the scope of regulated individuals subject to it was divined by judges, not elected legislators,” Levoff’s lawyer Kevin Marino said in an April filing. “This alone renders the criminal prosecution of insider trading unconstitutional.”
But prosecutors said in their own filing on Friday that the Supreme Court has held for decades that a corporate insider who trades on material nonpublic information violates federal securities laws. They said the allegations in the indictment against Levoff constituted “insider trading at its most basic” and called Levoff’s conduct particularly “flagrant” given his position as as senior lawyer responsible for Apple’s compliance with securities laws.
MacDailyNews Take: Only on planet Levoff is the criminalization of insider trading “unconstitutional.”
A reminder: One of Levoff’s responsibilities at Apple was making sure that Apple employees didn’t do any insider trading!
As we wrote last October, “If found guilty, prosecute him to the fullest extent of the law – and not in some Club Fed white-collar, minimum-security resort, either.”
Crazy as it seems he has an argument. Congress still gets to practice insider trading, but the average person does not. That’s an equal protection equal rights argument. Why does the law apply to one privileged group (notice how everyone goes into government poor, yet come out rich, why? Do they all become warren buffet magically? No, they get to partake in insider trading legally) and not to others?
Don’t get me wrong, this guy seems like he’s probably guilty of sin, but his constitutional argument, IMO, could have some merit if he goes down the equal protection equal application of law line of reasoning.
What makes you think Congress can legally practice insider trading? Or do you mean that they do it even though it’s illegal?
They have exemptions and they also cheat
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Sad that as an exec in the senior ranks, he was probably making mid 6 figures, if not more in annual salary. Add in the Restricted Stock Units he was also most likely getting, plus the additional AAPL stock he would have been able to legally purchase at a discount via the Employee Stock Purchase Plan (up to 10% of one’s salary every 6 months), his compensation would have easily added up to the multi-millions of dollars in less than 10 years at Apple. But that wasn’t enough for him.
Man… he’s got five kids to feed