The Securities and Exchange Commission has filed a lawsuit against Gene Daniel Levoff, who was Apple's senior corporate law director until September 2018. Levoff is accused of using his position for illegal stock deals with Apple.
Levoff was part of Apple's Disclosure Commission – one of the people who could review the quarterly financial statements of the company before they were released. SEC claims to have used non-public information received as part of the commission to inform about the transactions it made from Apple's shares. For example, in July 2015, he learns that Apple will miss analytical estimates of iPhone sales. Between July 17 and July 21, when Apple released its quarterly revenue report, it sells almost all of its stake in Apple's shares at a total of nearly $ 10 million. When the news became public, Apple's stock price dropped by more than 4% – the sale of early avoided losses of about $ 345,000.
The SEC claims that between 2011 and 2012 Levoff received $ 245,000 in profit and in 2015 and 2016 it avoided losses of $ 382,000.
Apple fired Levoff last year after conducting an internal investigation in response to contact from the authorities. During his career at Apple, he is one of the people responsible for ensuring that employees follow company's internal trade policy. In 2015, he even made a policy update. SEC submission says three times in 2010 and 2011 Levoff sends employees an email to warn them that the company is entering a blackout period and that it is forbidden to trade Apple shares. Two of these emails were "just before" for his domestic trade in 2011.
One of these emails included the following reminder:
REMEMBER, WILL NOT BE AUTHORIZED, OR IN AN OPEN TRADE WINDOW, IF YOU ACCEPT OR OR ACCESS TO MATERIAL INFORMATION WHICH IS NOT LIABLE
The SEC requires Levoff to pay an amount equal to the profits and losses that have been avoided over the past five years, together with a threefold sanction of that amount. The agency also insists that it be forbidden to serve as an officer or director of a public company. At the same time, the US Prosecutor in Newark, New Jersey, has filed criminal charges with maximum punishment of 20 years in prison and a fine of $ 5 million.