The man who once in charge of making sure Apple’s employees stayed on the straight and narrow is going to jail for doing the thing he told them never to do with stock trades: game the system.
Gene Levoff, who worked as Apple’s head of corporate law for most of the 2010s, admitted to using his position to rack up over $US600,000 ($832,920) in ill-gotten gains on more than $US14 ($19) million in trades from 2011 to 2016. He pleaded guilty late Thursday to six charges of securities fraud for using his knowledge of the tech giant’s quarterly earnings to make a buck on the stock market.
Each count normally carries a 20-year sentence and $US5 ($7) million fine, though the guilty plea will likely lessen that time when he is sentenced Nov. 10, according to Reuters.
In a statement Thursday, U.S. attorney Vikas Khanna said that Levoff “betrayed the trust of one of the world’s largest tech companies” in order to “line his own pockets.”
According to the original 2019 indictment, Levoff first came to Apple in 2008 and in 2013 was named senior director of corporate law. In that position, he was responsible, in part, for overseeing Apple’s compliance with securities law under the Securities and Exchange Commission. Prosecutors also said he was co-chair of a committee that reviewed early copies of Apple’s quarterly earnings. In February 2018, he was named corporate secretary, a title he kept until that September when he was finally fired.
Levoff was supposed to be subject to Apple’s “blackout periods,” meant to stop people in-the-know from trading until after the company disclosed its quarterly financial results, according to U.S. attorneys. The former bigwig ignored the restrictions and repeatedly executed trades.
The original 2019 SEC complaint included examples of Levoff’s shady dealings. Feds said he had access to 2015 data that showed Apple would miss third quarter estimates for iPhone sales, so Levoff turned around and sold $US10 ($14) million of Apple stock from his personal brokerage accounts. He did so only after reminding employees that these kinds of trades were illegal, according to the complaint. At the time of the original complaint, Apple told CNBC that authorities had contacted the company’s higher ups in the summer of 2018, and after Apple conducted its own internal investigation, before finally canning Levoff.
The irony of his alleged crimes was not lost on the federal investigators who filed the original complaint. The SEC included an email Levoff sent to employees in 2011 reading in all-caps:
“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.”
In the statement, Terence Reilly, acting agent in charge for the FBI’s Newark office, said that insider trading is especially harmful for Americans “whose retirement savings [are] invested in these companies.”