Apple’s Former Top Corporate Lawyer Pleads Guilty To What He Was Supposed To Prevent – Insider Trading

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On Thursday, the former top corporate counsel for technology giant Apple pled guilty to insider trading.

The fraud by Gene Levoff, 48, of San Carlos, lasted five years, according to a news release issued by the US Department of Justice on Thursday. Levoff, who was accused in early 2019, pleaded guilty to six charges of securities fraud.

“Gene Levoff betrayed the trust of one of the world’s largest tech companies for his own financial gain,” federal prosecutor Vikas Khanna said.

“Despite being responsible for enforcing Apple’s own ban on insider trading, Levoff used his position of trust to commit insider trading to line his own pockets.”

FBI special agent Terence Reilly called Levoff’s scheme “gaming the system” and said it jeopardized the stock market’s existence.

“The average American has every right to expect that the rules are being followed, the game is being played fairly, and their nest egg is safe from profiteers who willingly sidestep the rules to improve their own financial future at the expense of others,” Reilly stated.

According to the Justice Department, Levoff, who co-chaired the Apple committee that reviewed draft quarterly and yearly earnings data and regulatory filings before they were publicly disclosed, misappropriated non-public information about Apple’s financial results and then traded the company’s stock.

“Levoff mined these materials for inside information about Apple to guide his decisions to buy and sell Apple stock ahead of its earnings announcements,” the department said.

When Apple had great revenue and profit for a certain period, Levoff purchased huge shares and sold them for a profit once the market reacted to the news, according to the department.

“When there were lower-than-anticipated revenue and net profit, Levoff sold large quantities of Apple stock, avoiding significant losses,” according to the department.

According to the department, Levoff ignored the “blackout periods” that prevented employees with such non-public information from trading the firm’s stock until the financial results were publicly published.

“On several occasions, Levoff executed trades within a blackout period after notifying other individuals subject to the restriction that they were prohibited from buying or selling Apple stock until the blackout period terminated,” the department said.

“This scheme to defraud Apple and its shareholders allowed Levoff to realize profits of approximately $227,000 on certain trades and avoid losses of approximately $377,000 on others.”

According to the accusation against Levoff, the fraud occurred between 2011 and 2016. His Apple stock transactions ranged from 2,000 to over 43,000 shares.

Each count of securities fraud carries a maximum sentence of 20 years in prison and a $5 million fine. However, maximum penalties are rarely imposed due to federal sentencing standards and judges’ discretion.

The sentencing of Levoff is set for November 10. However, according to the indictment, the case is being heard in New Jersey federal court, where the stock-trading platforms Levoff employed were situated.

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