Apple's former corporate secretary and director of corporate law Gene Levoff figures himself in another controversy after pleading guilty to accusations of securities fraud before the U.S. District Court.
(Photo : Guillaume Bleyer on Unsplash)
Apple's Former Corporate Secretary Gene Levoff Admits to Insider Trading
First Assistant U.S. Attorney Vikas Khanna reported that Levoff admitted to a five-year insider trading conspiracy to the court on Thursday. He was accused of securities fraud on six counts, and he entered a plea of guilty.
Between February 2011 and April 2016, Levoff traded Apple stock after sharing materials and confidential information about the company's status and finances with unauthorized parties. Using this dishonest method, he raked in $227,000 in profits from specific trades.
In addition, he was able to save others from suffering losses totaling more than $377,000 in value. The declarations made in court and the records submitted in the case reveal all of these specifics.
Levoff is charged with betraying one of the biggest IT corporations in the world for his own gain. The Court also highlighted that he took advantage of his position to uphold Apple's prohibition against insider trading to get around the limitations and line his own pockets.
"This defendant exploited his position within a company strictly for financial gain that he would not have otherwise realized," Terence Reilly, FBI Acting Special Agent in Charge in Newark, said.
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Insider Trading is More Than Just Being Illegal, FBI Says
Insider trading, according to Reilly, not only violates the law but also puts the stability of our markets in peril. According to Reilly, the typical American requires assurance from the government that the laws prohibiting unfair trade practices are strictly upheld. Making sure that the populace is protected against profiteers prepared to break the law at the expense of others is one of FBI's objectives in this regard.
Levoff served as co-chairman of Apple's Disclosure Committee, which was responsible for reviewing and debating the organization's draft quarterly and annual earnings materials as well as periodic U.S. filings with the Securities and Exchange Commission (SEC) before they were made public. In order to inform his decisions to buy and sell Apple stock before its earnings announcements, Levoff scoured these sources for inside knowledge about the company.
He bought a lot of stock when Apple reported good revenue and net profit for a particular financial quarter, which he later sold for a profit once the market reacted to the news. Levoff sold a considerable amount of Apple stock when revenue and net profit were less than expected, preventing him from suffering severe losses.
Levoff regularly carried out trades based on important, nonpublic information without Apple's knowledge or consent, disobeying the company's rigorous rules against disclosing sensitive information as well as its general insider trading policy. Levoff made many trades during a blackout period after informing other parties subject to the restriction that they couldn't purchase or sell Apple stock until the blackout period was over.
On the basis of the same case, the SEC also has a lodged civil lawsuit against Levoff. The maximum sentence for each conviction of securities fraud is 20 years in jail and a $5 million fine. The sentencing date is set for November 10, 2022.
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Written by Errol Villorente
