The job of a top lawyer at Apple Inc. was to ensure that no employees violate the company's insider-trading policies. It turned out that he was the one who was trading Apple Shares illegally, according to US regulators.
The US Securities and Exchange Commission (SEC) filed a lawsuit against Gene Daniel Levoff, who served as Apple's senior director of corporate until September 2018 and was also a part of the company's disclosure committee. According to the filing, Levoff exploited his well-placed position to manage his Apple shares trading privately. He would gain access to the company's periodic earnings results and draft public filing before release.
Levoff would then use the information to plan his trades. If the report were bullish, he would purchase Apple shares at a lower rate. If bearish, he would sell them ahead of others.
“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, an associate director at SEC, said in a press statement.
$727,000 Potential Loss Avoided
The SEC mentioned that Levoff had broken Apple's insider-trading policies on at least three accounts. For instance, in July 2015, he had allegedly learned about Apple's poor iPhone sales report. At that time, Levoff almost sold his entire Apple holding, which was worth $10 million. After Apple released the quarterly report, it's share plunged by over 4 percent. To that end, Levoff avoided a potential loss of approximately $345,000.
The SEC also alleged that Levoff made $245,000 in profits between 2011 and 2012. Later, in 2015 and 2016, he avoided losses worth $382,000. Adding that to Levoff's $345,000-potential loss, the former Apple lawyer was able to circumvent losses amounting to at least $727,000.
Apple confirmed that Levoff conducted illegal trades during his tenure at their company. The tech giant clarified that it had initiated an internal investigation against Levoff after receiving a tip from the SEC in 2017. They ended up terminating him in September 2018 after placing him on a two-month leave.
"After being contacted by authorities last summer, we conducted a thorough investigation with the help of outside legal experts, which resulted in termination," Josh Rosenstock, Apple's spokesperson, told Bloomberg.
If found guilty, Levoff could end up paying a sum equal to the profits and losses he made from his alleged insider trading activities, the SEC stated. He can also face a penalty three times that amount. Atop that, Levoff is also looking at a potential ban from serving as a director in public traded companies.
The US attorney has also filed criminal charges against Levoff which could have him face up to 20 years in jail and a $5 million fine.
CCN is attempting to reach Levoff's attorney for additional statements. Kindly watch this space for more updates.