SEC charges former Apple lawyer with insider trading

Cornelia Mascio
Febbraio 14, 2019

It turns out he was the one who was buying and selling shares illegally, according to the US authorities.

The US Securities Exchange Commission (SEC) said Mr Levoff engaged in insider trading various times between 2011 and 2016. Levoff could not immediately be reached for comment, and a lawyer for him could not immediately be identified.

"For example, in July 2015 Levoff received material nonpublic financial data that showed Apple would miss analysts' third quarter estimates for iPhone unit sales". That month, he sold about US$10 million of Apple stock - virtually all of his holdings. When the news became public, Apple's share price dropped by more than 4 percent-selling early avoided losses of approximately $345,000. Levoff, 45, is slated to appear in federal court next week, according to Marino.

The allegations are a black eye for Apple, which has mostly had a clean record over financial reporting issues since its co-founder and former Chief Executive Officer Steve Jobs was accused of options backdating by shareholders in the mid 2000s.

The biggest trade came in July 2015 when he sold $10m of his own Apple stock - nearly everything he had - to avoid losing money because he found out ahead of time that Apple's results were worse than the market anticipated, the SEC claims. Levoff's alleged misconduct was relatively simple for someone who worked at a cutting-edge technology giant. The SEC maintains that he used nonpublic information obtained as part of the committee to inform trades he made of Apple shares.

"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", SEC enforcer Antonia Chion said in a statement. He was sacked from Apple in September 2018.

Authorities said Levoff reported to Apple's general counsel and has been a corporate officer of every major subsidiary of the Cupertino, California-based company. The complaint also says Levoff had been involved in insider trading at least three more times in 2011 and 2012, making around $245,000 in profit.

"After being contacted by authorities last summer, we conducted a thorough investigation with the help of outside legal experts", Apple spokesman Josh Rosenstock said in a Wednesday statement. Simultaneously, the US Attorney in Newark, New Jersey, has filed criminal charges, which carry a maximum penalty of 20 years in prison and a $5 million fine.

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