In House - The FindLaw Corporate Counsel Blog

Apple's Insider Trading Expert Accused of Selling Before Bad News

Gene Daniel Levoff, who was Apple's senior director of corporate law, made some bad trades with his company shares.

He didn't lose money on the deals. According to reports, he sold nearly $10 million in stock over five days in 2015.

The bad part, says the Security and Exchange Commission, was that he sold his shares based on inside information.

Inside Information

Levoff was part of Apple's Disclosure Committee, and was responsible for telling employees not to trade during blackout periods. The SEC says in a lawsuit that on one occasion he emailed workers about it "immediately prior" to his own insider training.

"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," he allegedly wrote.

The SEC says that between 2011 and 2012, Levoff made $245,000 in profit using insider information. In 2015 and 2016, he avoided losses totaling $382,000.

He reportedly made the trades prior to quarterly financial reports, including projections that iPhone sales would be down. Apple fired him last year after an internal investigation, Ars Technica reported.

Criminal Charges

The SEC wants Levoff to pay for the profits and avoided losses, plus a penalty three times that amount. The agency also wants to ban him from serving as an officer or director of a publicly traded company.

Meanwhile, the U.S. Attorney in Newark, New Jersey has filed criminal charges against him. They carry a penalty of 20 years in prison and a $5 million fine.

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