Former Apple lawyer pleads guilty to insider trading

A former senior Apple attorney who enforced its insider trading policies pleaded guilty Thursday to perpetrating an insider trading scheme, which prosecutors say had involved trading in stock before the company announced it failed to comply. iPhone sales expectations.

In 2019, the Justice Department charged Gene Levoff, who was a senior director of corporate law at Apple until he was fired in late 2018, with using nonpublic information about Apple’s financial results that helped him avoid losses and collect profits. while illegally transacting before the company’s earnings reports.

Between 2011 and 2016, Levoff avoided losses of $377,000 before Apple broke bad news about his iPhone business and made profits of more than $220,000 before breaking good news, according to documents filed in US District Court in Newark. . The transactions violated quarterly “blackout periods,” which prohibit trading by people with access to material nonpublic information.

In one example from 2015, Levoff sold $10 million worth of Apple stock before the company said it would miss analysts’ iPhone unit sales estimates, helping him avoid losses when the stock fell 4 percent. percent due to disappointing quarterly results.

On multiple occasions, Levoff made the trades after sending an email to Apple employees saying such trades are restricted, according to the initial complaint. Apple’s insider trading policy said that anyone with material non-public information about the company could not trade until 60 hours after that information was announced.

“This defendant took advantage of his position within a company strictly for financial gain that he otherwise would not have made,” said Terence Reilly, FBI Acting Special Agent for the Newark office, who led the investigation. “That’s called ‘gambling the system.'”

Levoff’s attorney declined to comment. Apple did not respond to a request for comment.

In 2020, Mr. Levoff’s legal team filed a motion to dismiss the case, arguing that the complaint was unconstitutional because there was no law against insider trading. But Judge William Martini rejected the motion, saying the argument was “wrong” and that Congress had passed laws to ensure “fair and honest markets.”

Before being fired, Levoff briefed Apple’s general counsel. He was part of the company’s disclosure committee, a group that helped prepare Tim Cook, Apple’s chief executive, and Luca Maestri, its chief financial officer, ahead of quarterly disclosures to investors.

The securities fraud charges in Mr. Levoff’s guilty plea carry a maximum sentence of 20 years and a $5 million fine. Sentencing is scheduled for November 10.

A separate lawsuit from the Securities and Exchange Commission is still pending. The agency was seeking a ruling that would force Mr. Levoff to repay his earnings from the transactions.

Leave a Comment

Your email address will not be published.