Former Apple executive Gene Levoff has been accused of insider trading by the SEC, according to court documents filed Wednesday.
The lawsuit alleges that Levoff, formerly Apple’s Senior Director of Corporate Law and Corporate Secretary, “exploited his positions as a senior attorney and a member Apple’s Disclosure Committee to unlawfully trade Apple securities ahead of Apple quarterly earnings announcements.” CNBC first reported the lawsuit.
Levoff violated the duty of trust and confidence he owed Apple and its shareholders in two respects, the lawsuit says: “First, as head of the Corporate Law group at Apple, Levoff was responsible for ensuring compliance with the company’s insider trading policy and determining the criteria for those employees (including himself) restricted from trading around quarterly earnings announcements. At the same time, as a member of Apple’s Disclosure Committee, Levoff received material nonpublic information about Apple’s financial results.”
Apple has not responded to Business Insider’s request for comment.
According to the document, Levoff traded on the basis of insider information on at least three occasions in 2015 and 2016. In July 2015, for example, Levoff received material nonpublic financial data that showed Apple would miss analysts’ third-quarter estimates for iPhone unit sales, the lawsuit says. Levoff is said to have profited and avoided losses of approximately $382,000 through illegal insider trading that took place in 2015-2016, according to the document.
Prior to these instances, Levoff also engaged in insider trading on three separate occassions in 2011 and 2012 that resulted in him making approximately $245,000 in profits, the document says.
Before being terminated in September 2018, Levoff served as Director of Corporate Law at Apple from 2008 through 2013 and was named Senior Director of Corporate Law in 2013, as the lawsuit states. He also served on Apple’s Disclosure Committee from September 2008 through July 2018.
Given Levoff’s role at Apple, which included duties such as providing legal advice on securities laws and “devising, implementing and enforcing” Apple’s insider trading policy, Levoff either “knew or was reckless in not knowing” that the earnings materials and filings were material and nonpublic, according to the document.
The lawsuit cites one example illustrating Levoff’s role in enforcing such policies by detailing an email Levoff sent to Apple employees on February 24, 2011 notifying employees that a blackout period would begin on March 1, 2011. “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,” the first sentence of the email read according to the complaint. The lawsuit goes on to say that Levoff sent two such emails to employees “immediately prior” to engaging in insider trading in 2011.
See below for the full document:
from News Viral Story http://bit.ly/2TM4B9O
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