Facepalm: One of Apple's senior corporate lawyers who was "responsible for Apple's compliance with securities laws," has himself been charged with insider trading. Gene Levoff made numerous transactions in the past decade worth tens of millions of dollars and has now been charged by the SEC and DoJ.
The SEC announced their charges yesterday and cover three transactions in 2015 and 2016. They also state that Levoff had a history of insider trading going back to additional transactions he made in 2011 and 2012.
Levoff traded on material nonpublic information which helped him profit and avoid losses of nearly $400,000. The full list of charges was published by CNBC and is available here.
Because of his senior position at Apple, he had access to unreleased iPhone sales numbers. Companies traditionally put in place "blackout" periods where employees with such information are not allowed to make any stock transactions. Levoff was the one in charge of notifying employees of this blackout and instructed them not to make any transactions during it.
The SEC alleges that he violated these periods and went on to sell when numbers were bad and buy shortly before Apple announced positive numbers. Part of their charges are included below.
Levoff shared responsibility for ensuring that employees complied with Apple’s insider trading policies. On at least three occasions in 2010 and 2011, Levoff sent emails to company employees notifying them that a blackout period was about to commence and that they were prohibited from trading Apple securities for the duration of the period. In fact, Levoff sent two such emails immediately prior to his insider trading in 2011
For example, on February 24, 2011, Levoff sent an email to Apple employees explaining that a blackout period would begin on March 1, 2011, and remain in effect “until 60 hours after earnings are released in April 2011."
The first sentence of Levoff’s February 24, 2011 email stated: “REMEMBER,TRADING IS NOT PERMITTED, WHETHER OR NOT IN AN OPEN TRADING WINDOW, IF YOU POSSESS OR HAVE ACCESS TO MATERIAL INFORMATION THAT HAS NOT BEEN DISCLOSED PUBLICLY.”
In summary, Levoff, an Apple insider, traded on the basis of material, nonpublic information about Apple’s earnings results in violation of the company’s policies and in breach of the fiduciary duty that he owed to the company
Levoff has also been charged with securities fraud by the Department of Justice and is scheduled to appear in court on February 20th. His lawyer told CNBC that they "look forward to defending him" which is about as far as you can get from a denial of guilt.
Apple put Levoff on leave in July of 2018 and officially fired him two months later after conducting an investigation with outside legal experts.