(CN) – Most corporate executives tasked with enforcing insider-trading rules might understand to keep their own noses clean as well. But at Apple, home of the slogan “Think Different,” the official given this role now faces federal charges.
A 45-year-old former lawyer who previously served as Apple’s global head of corporate law and corporate secretary, Gene Levoff is accused of raking in or avoiding losses totaling more than $600,000 in illegal trades between 2011 and 2016.
“On at least three occasions in 2015 and 2016, Levoff traded on the basis of insider information,” a complaint against Levoff by the Securities and Exchange Commission states. “For example, in July 2015, Levoff received material nonpublic financial data that showed Apple would miss analysts’ third quarter estimates for iPhone unit sales. Between July 17 and the public release of Apple’s quarterly earnings information on July 21, Levoff sold approximately $10 million dollars of Apple stock – virtually all of his Apple holdings – from his personal brokerage accounts. Apple’s stock dropped more than four percent when it publicly disclosed its quarterly financial data. By trading on this material nonpublic information, Levoff avoided approximately $345,000 in losses.”
Apple's shareholders lost $32 billion on paper during this time, the government claims.
The Department of Justice and the commission filed their criminal and civil complaints, respectively, in New Jersey federal court on Wednesday.
“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, the commission’s associate director for enforcement, said in a statement.
If convicted in his criminal case, Levoff could face up to 20 years imprisonment and a $5 million fine. The civil case demands that the executive pay a penalty three times to the profits made or losses avoided on his alleged scheme and barring him from serving as a director or officer of a public company.
Levoff’s attorney Kevin Marino did not immediately respond to an email request for comment.
Assuming various roles in Apple’s corporate law department starting in 2008, Levoff rose in the company’s ranks to senior director of corporate law in 2013. He oversaw as many as 30 attorneys before Apple fired him last September.
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