The shine on Apple is getting a little tarnished. Today, the SEC filed a suit against Gene Levoff, a lawyer who used to work for the iPhone giant, accusing him of insider trading, selling millions of dollars in stock ahead of earnings and saving himself some $382,000 in losses the process, and in a separate, earlier period, $245,000 in profits. Levoff started to work for Apple in 2008, first as director of corporate law and then senior director. He was put on leave from Apple in July 2018, and his employment was terminated in September 2018.
The suit covers activities 2015 and 2016, years when Apple saw a dip in performance before it roared back with a trillion dollar market cap in 2017. The news is especially ironic — although perhaps not surprising, considering the information Levoff had at his disposal: he had been the company’s Senior Director of Corporate Law and Corporate Secretary of Apple and was “responsible for ensuring compliance with the company’s insider trading policy and determining the criteria for those employees (including himself) restricted from trading around quarterly earnings announcements.”
It also worked in the other direction. The SEC alleges that Levoff also made trades in 2011 and 2012 also ahead of market-moving news that helped him make profits of $245,000.
The SEC is requesting that Levoff pay a civil monetary penalty, disgorging “an amount equal to the profits gained and losses avoided as a result of the actions described herein,” and that he be prohibited from serving as an officer or director of a public company.
The SEC suit covers trades on “at least” three occasions between 2015 and 2016, where Levoff would have access to financial data before it was released to the public and subsequently make trades on that information. One example noted in the suit notes that he sold $10 million in stock in July ahead of Apple reporting that it would miss expectations on iPhone sales.
The SEC makes a point of noting the disconnect between Levoff’s actions for his own gain and his role at the company. Among his duties was serving on Apple’s Disclosure Committee, “established to assist the Chief Executive Officer and Chief Financial Officer in fulfilling their responsibility for oversight of the accuracy and timeliness of disclosures made by Apple; determine Apple’s disclosure obligations and ensure information contained in Apple’s filings to the SEC and all other disclosures are timely, accurate, complete, and a fair representation of Apple’s financial condition and results of operations; and ensure that Apple’s disclosure controls and procedures are properly designed, adopted and implemented.”
But it also makes a point of clearing Apple itself of wrongdoing:
The news is pretty explosive, in the context of Apple being one of the more tight-lipped companies and generally positioning itself as a model corporate citizen, taking a strong stand not just on issues like user privacy but priding itself on strong customer products and service, at a premium price compared to much of the competition.
We have reached out to Apple for comment, and will update this post as we learn more.
social experiment by Livio Acerbo #greengroundit #techcrunch http://feedproxy.google.com/~r/Techcrunch/~3/zRwBEXCMLko/