Gene Levoff, Apple's former executive, is accused of the United States Securities and Exchange Commission of violating the company's insider trading policy in 2015 and 2016. The executive was said to have committed the violation after selling off about $10 million in Apple stock prior to a quarterly earnings announcement.
The executive is Apple's senior director of corporate law and corporate secretary until last year. The complaint filed to the United States District Court in New Jersey on Wednesday said that, as head of the company's corporate law group, he is responsible for ensuring that the Apple's insider trading policy was completed. He is also responsible for determining the criteria for employees that are restricted from trading around quarterly earnings announcements.
The SEC said that the executive used inside information about the company's finances to avoid losses or gain for himself by trading Apple's stock on at least three occasions in 2015 and 2016. SEC noted that in July 2015, the executive received material non-public financial data that showed Apple would miss analysts' third-quarter estimates for iPhone unit sales. He also sold about $10 million dollars of Apple stock from his personal brokerage accounts between July 17 and the release of Apple's quarterly earnings information publicly on July 21. It is followed by a drop in Apple's stock by 4 percent after the quarterly financial data was disclosed publicly. The executive avoided around $345,000 losses by trading on the material non-public information.
Following the SEC charges, the Department of Justice also announced that it has charged Levoff with a securities fraud case. If he is found guilty, he will endure 20 years of imprisonment with a $5 million fine.
Levoff started as the company's senior director of corporate law in 2013 after serving as its director of corporate law. He also served the company as its chair for Disclosure Committee between September 2008 and July 2018. In his chairmanship, he has access to material non-public information about the company's financial results. The executive was fired from the company in September 2018 after a forced leave.
The accusation of the SEC points directly to Levoff and not on the company. It says that he took steps to prevent Apple employees from trading on material non-public information that includes undisclosed financial results. According to SEC, Levoff's role includes sending and supervising the transmission of notification emails to parties subject to trading restrictions around the company's quarterly earnings announcements.
