Former Apple lawyer formally indicted for insider trading

Posted:
in General Discussion edited October 2019
Former Apple lawyer Gene Levoff, who oversaw the company's Insider Trading Policy as corporate secretary and senior director of corporate law, was on Thursday indicted for insider trading and faces a maximum penalty of 120 years in prison.

Gene Levoff
Gene Levoff | Source: Bloomberg


The U.S. Attorney's Office for the District of New Jersey announced Levoff is being brought to task for arranging and executing a five-year insider trading scheme.

As a member and co-chairman of Apple's Disclosure Committee, Levoff had access to the company's financials prior to public reporting, information he used to seek unjust enrichment through a series of beneficial stock trades.

Though he was bound by "blackout periods" which prohibited people with knowledge of Apple's material nonpublic information from buying or selling stock, Levoff "repeatedly" ignored company guidelines and conducted trades based on undisclosed intel. For example, Levoff would buy large quantities of Apple stock if the firm posted strong earnings, subsequently selling off shares for a profit once the news was made public. Likewise, if Apple failed to hit Wall Street estimates or posted a weak quarter, he would sell off owned stock before the market reacted.

"This scheme to defraud Company-1 and its shareholders allowed Levoff to realize profits of approximately $227,000 on certain trades and to avoid losses of approximately $377,000 on others," the release said.

Ironically, Levoff was in charge of enforcing the blackout period as part of Apple's wider trading policy and would sometimes conduct illicit trades after notifying others of the restrictions.

Levoff faces six counts of security fraud and six counts of wire fraud, each of which carries a maximum penalty of 20 years in prison. In addition, the securities fraud counts carry a $5 million fine, while the wire fraud counts rate a fine of $250,000 or twice the gain derived from or loss caused by the offense, the release said.

CNBC reported on the indictment earlier today.

An Apple veteran who started with the company in 2008, Levoff was formally charged with insider trading by the U.S. Securities and Exchange Commission in February. He was previously out on bail after posting a $500,000 bond that same month. At the time, the SEC said the executive broke trade rules three times in 2011 and 2012, with another three incidents occurring between 2015 and 2018.

Apple forced Levoff to take leave, and ultimately fire him, after being informed of the indiscretions in 2018.

"After being contacted by authorities last summer we conducted a thorough investigation with the help of outside legal experts," Apple said in a statement to AppleInsider in February. "This resulted in termination."
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Comments

  • Reply 1 of 24
    hentaiboyhentaiboy Posts: 1,244member
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    minicoffeejeffharrisrandominternetperson
  • Reply 2 of 24
    Quis custodiet ipsos custodes?

    Well, apparently the government is.  
    :D 




  • Reply 3 of 24
    MplsPMplsP Posts: 3,251member
    I suppose he can't claim ignorance
  • Reply 4 of 24
    macxpressmacxpress Posts: 5,172member
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Yeah I don't get it either. I don't know why people think they won't get caught. Even if its not right away, you will eventually get caught and him being a lawyer should know better anyways. An everyday person who may not have a complete understanding of the rules I'd give a little more leniency for, but not someone like a lawyer. 
  • Reply 5 of 24
    lkrupplkrupp Posts: 9,455member
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
  • Reply 6 of 24
    120 years for $227,000 in profits? Gee, that doesn’t sound completely out of whack...

    How about he be forced to pay restitution and serve a far shorter sentence? The cost to taxpayers for his prison sentence will run into the millions of dollars.
    CarnageAppleExposed
  • Reply 7 of 24
    sflocalsflocal Posts: 5,728member
    This guy is no better than a purse snatcher in a seedy back alley.  With his position, salary, stock options, bonuses, etc... did he just think this was just a game for a quick and easy buck? 

    Seriously.  While I think the sentence for what he did is harsh compared to what others get (like murderers and rapists), to just throw that all away on what is probably chump-change for him is really sad.
  • Reply 8 of 24
    This is disgusting, inexcusable behavior. Throw the book at him. The Brittanica, preferably.
    edited October 2019
  • Reply 9 of 24
    120 years for $227,000 in profits? Gee, that doesn’t sound completely out of whack...

    How about he be forced to pay restitution and serve a far shorter sentence? The cost to taxpayers for his prison sentence will run into the millions of dollars.
    He will get no where near that number of years. Writers like to quote the maximum number of years because it sounds so ominous.  White collar crime rarely ever gets adjudicated at maximum sentencing.  Heck regular crime rarely see max sentencing. Just a guess, but he'll probably get around 10 years, a hefty fine and probation for the entire debacle. 
    edited October 2019 minicoffee
  • Reply 10 of 24
    It never ceases to amaze me how well-paid people will cheat to put a few extra dollars in their pocket. Of course, I don't know his financial situation but is it really worth risking your career or worse for a relatively small gain? I just don't get it...
  • Reply 11 of 24
    This kind of 'white collar' crime is disgusting. I hope he gets 120 years. We will spend thousands of dollars and tremendous effort to track down and jail petty criminals, many who aren't living on mansions. Go to your local courthouse and watch as people plead 'guilty' to lesser crimes just to get out of jail for time served etc. Our justice system is hardly blind! All these multi million dollar 'cheats' should get the max when they get caught.
    Carnageronn
  • Reply 12 of 24
    I guess Gene Levoff didn't get Tim's message about how all Apple employees should be upstanding professionals... protecting/enhancing the product and its customers.

    Too late for him, as a cheater, now... but a bit of advice for us all: Don't try to time the market. Over time, you will fail, as a rule.

    I was told: Look for companies that you buy from, know and admire, and invest in them. Don't sell unless you absolutely need to.

    I started buying AAPL when it was $25. It's done OK.


    edited October 2019
  • Reply 13 of 24
    dewmedewme Posts: 3,814member
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Of course the actions of this individual do not make sense.  This is simply a manifestation of the duality of the human condition. Humans can be amazingly insightful, creative, compassionate, logical, selfless, and enlightened. But these same humans can also be insanely cruel, unspeakably violent, selfish, and devoid of any reason for their actions. If the human brain was an operating system it would not even be ready for an early beta release, but it’s all we’ve got. 
  • Reply 14 of 24
    MplsPMplsP Posts: 3,251member
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Actually, the shoplifter at walmart may be doing it because they have no money. This guy had plenty of money and stole to get more. Stealing is wrong, buy if someone is stealing out of desperation you could at least try to make a moral argument. Levoff is a crook any way you cut it.
    jeffharrisCloudTalkinronnStrangeDays
  • Reply 15 of 24
    mpantonempantone Posts: 1,609member
    He is an effing moron.

    $227K swindled over five years is less than $50K per year. That's chump change in Silicon Valley for someone of his stature. That comes down to $124/day which is less than the ~$16/hr. minimum wage in many Silicon Valley cities (well, if someone works 24 hrs. or earns overtime). He basically violated insider trading laws so he could pay off his gardener and housekeeper. (Okay, so I'm exaggerating a little, but it's still damned pathetic.)

    And he probably did it because he thought it was a small enough amount that no one would notice. He knew if he got tens of millions via insider trading, he would have been nailed.

    He probably tried this to prove to himself that he was smarter than everyone -- including the Feds.
    edited October 2019 CarnageAppleExposedrandominternetperson
  • Reply 16 of 24
    MplsP said:
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Actually, the shoplifter at walmart may be doing it because they have no money. This guy had plenty of money and stole to get more. Stealing is wrong, buy if someone is stealing out of desperation you could at least try to make a moral argument. Levoff is a crook any way you cut it.
    Of course he’s a crook, but restitution plus a penalty serves everyone involved’s interests so much better than a ridiculously long prison term. After all, he committed theft, not murder.
    edited October 2019
  • Reply 17 of 24
    MplsP said:
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Actually, the shoplifter at walmart may be doing it because they have no money. This guy had plenty of money and stole to get more. Stealing is wrong, buy if someone is stealing out of desperation you could at least try to make a moral argument. Levoff is a crook any way you cut it.
    Of course he’s a crook, but restitution plus a penalty serves everyone involved’s interests so much better than a ridiculously long prison term. After all, he committed theft, not murder.
    MplsP said:
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Actually, the shoplifter at walmart may be doing it because they have no money. This guy had plenty of money and stole to get more. Stealing is wrong, buy if someone is stealing out of desperation you could at least try to make a moral argument. Levoff is a crook any way you cut it.
    Of course he’s a crook, but restitution plus a penalty serves everyone involved’s interests so much better than a ridiculously long prison term. After all, he committed theft, not murder.
    MplsP said:
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Actually, the shoplifter at walmart may be doing it because they have no money. This guy had plenty of money and stole to get more. Stealing is wrong, buy if someone is stealing out of desperation you could at least try to make a moral argument. Levoff is a crook any way you cut it.
    Of course he’s a crook, but restitution plus a penalty serves everyone involved’s interests so much better than a ridiculously long prison term. After all, he committed theft, not murder.
    Wouldn’t it be nice if someone who can afford it would have to pay for all costs of all parties involved (including costs for jail time) plus a fine that’s more than a slap on the wrist, and in addition his license as a lawyer would be revoked?
  • Reply 18 of 24
    jcs2305jcs2305 Posts: 1,216member
    sflocal said:
    This guy is no better than a purse snatcher in a seedy back alley.  With his position, salary, stock options, bonuses, etc... did he just think this was just a game for a quick and easy buck? 

    Seriously.  While I think the sentence for what he did is harsh compared to what others get (like murderers and rapists), to just throw that all away on what is probably chump-change for him is really sad.
    Even at that salary and position people live beyond their means. Just because you make a lot and have a lot doesn't mean you are smart about it. Plus at a certain income level some folks believe the can actually do whatever they want.. it's amazing to me.

    As you said to throw it all away for what is chump change to him is just crazy. Makes me think that he was getting away with stuff like this for quite a while before being caught.
  • Reply 19 of 24
    hmurchisonhmurchison Posts: 12,341member
    Well.    My Drill Sargeant alway told me "If you ain't cheating ...you ain't trying". 


  • Reply 20 of 24
    StrangeDaysStrangeDays Posts: 11,566member
    lkrupp said:
    hentaiboy said:
    Fox guarding the hen house?

    It never fails to amaze me why these guys do this s**t. As a corporate lawyer for Apple, I'll bet he was on a pretty sweet salary...
    Doesn’t matter how wealthy you are, a thief is a thief. it’s a character flaw, or hubris, or delusions of importance, or something. The shoplifter at Walmart is no different than this guy, only the degree of the theft.
    Yeah except we give much lighter punishments to white collar criminals considering the size of the thefts, compared to common criminals. Membership has its privileges.
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