A former Apple attorney responsible for preventing insider trading has pleaded guilty to six cases of insider trading securities fraud, according to a Justice Department (DOJ) press release. Gene Levoff, once the company’s former corporate secretary and director of corporate law, “misappropriated material, nonpublic information about Apple’s financial results and then transacted in respect of the company’s stock” from February 2011 to April 2016, according to the report. the release. The charges against him were initially filed by the SEC as a civil complaint in 2019.
Levoff was also a member of Apple’s Disclosure Committee, a group that reviewed corporate earnings reports and SEC filings before they were published. Using information known to him, he could have made a profit of “about $227,000 on certain trades” and avoided losses of “about $377,000 on other trades,” according to the DOJ. Levoff also ignored the company’s quarterly “blackout periods,” even after telling others they couldn’t buy or sell Apple stock during that time, and the company’s insider trading policies.
In particular, Levoff co-chaired Apple’s Disclosure Committee, which reviewed and discussed the draft of the company’s quarterly and annual financial statements and the U.S. Securities and Exchange Commission (SEC) periodic filings before they were made public. Levoff has mined these materials for insider information about Apple to guide his decisions to buy and sell Apple stock ahead of earnings announcements. When Apple posted strong revenues and net income for a given financial quarter, it bought large amounts of stock, which it later sold for a profit once the market reacted to the news. When sales and net income were lower than expected, Levoff sold large amounts of Apple stock, avoiding significant losses.
Levoff’s sentencing is set for November 10. Apple did not immediately respond to a request for comment.