US charges former top Apple lawyer with insider trading

February 14, 2019 09:14
Apple's former top corporate lawyer is alleged to have misused his position to trade illegally in company stock ahead of earnings announcements. Photo: Reuters

A former top corporate lawyer at Apple was criminally charged by the US Department of Justice on Wednesday with insider trading, Reuters reports.

Gene Levoff exploited his positions as corporate secretary, head of corporate law and co-chair of a panel that reviewed draft copies of Apple’s financial results to trade illegally between 2011 and 2016 ahead of six of the firm's quarterly earnings announcements, authorities were quoted as saying.

According to prosecutors, Levoff, 45, generated US$604,000 in illegal gains, including realized profit and avoided losses, before Apple terminated his decade-long employment in September.

Levoff faces one count of securities fraud, carrying a maximum 20-year prison term and a US$5 million fine.

He is expected to appear on Feb. 20 in a federal court in Newark, New Jersey.

The US Securities and Exchange Commission filed related civil charges in the case, one of the rare instances of a senior lawyer at a major US company being implicated in a crime, Reuters noted.

"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,” Antonia Chion, associate director of the SEC’s enforcement division, said in a statement.

Kevin Marino, a lawyer for Levoff, said he is reviewing the allegations and that he looks forward to defending his client.

Apple said in a statement that it had terminated Levoff after an internal probe, and that it trains employees about their legal obligations.

As co-chairman of Apple’s disclosure committee, Levoff helped CEO Tim Cook and his predecessor, Steve Jobs, ensure the timeliness, accuracy and proper oversight of company disclosures, including financial results, according to authorities.

Despite this, prosecutors said Levoff bought and sold more than US$14 million of Apple stock, including US$10 million in July 2015 alone, after being given draft earnings materials but before the results were made public.

Authorities said Levoff knew or should have known he was breaking the law, citing a February 2011 email where he warned employees not to trade on material nonpublic information.

The charges against Levoff were filed in New Jersey, where authorities said servers were located for firms that handled Levoff’s illegal trades.

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