The Securities and Exchange Commission (SEC) has ordered former Apple Director of Company Law Gene Levoff to pay $450,000 in penalties for allegedly violating insider trading laws. Securities and Alternative Fee Structures: A Review of Insider Buying and Selling Practices, totaling $1.15 million. In late December, Levoff was sentenced to four years’ probation, including a fine.
By that point in time, the decision regarding the fantastic outcome was still pending; nonetheless, the judge overseeing the case delivered a verdict on Tuesday. Although the decide noted that Levoff’s violations were “particularly egregious,” it is unclear how this assessment was made given his claim of not having “dwelled excessively”?
As a key member of Apple’s compliance team, Levoff was responsible for guaranteeing that employees adhered to the company’s strict guidelines on insider trading, making his alleged transgression all the more egregious in the eyes of those who investigated.
Following Levoff’s appointment to curb insider trading at Apple, he gained early access to the company’s earnings results before they were publicly disclosed. With his newfound insights, he strategically invested in Apple shares ahead of time, capitalizing on the company’s consistently strong performance and profitably exiting positions when earnings fell short of expectations. Levoff’s questionable inventory transactions yielded a profit of approximately $277,000, simultaneously shielding him from potential losses of around $377,000.
In July 2015, Levoff foresaw that Apple would miss analysts’ third-quarter expectations for gross sales, prompting him to purchase $10 million worth of Apple stock between July 17 and July 21 – coinciding with the release of Apple’s earnings information. Following the announcement, Apple’s inventory plummeted by more than 4 percent.
Between 2011 and 2018, Levoff worked at Apple, but he exploited his privileged knowledge for personal gain during the initial seven-year period. In September 2018, Apple terminated its relationship with Levoff following an investigation into his activities, which had been brought to the company’s attention by law enforcement officials. Levoff was charged with six counts of securities fraud in June 2022, specifically regarding allegations of insider buying and selling. Federal prosecutors advocated for prison sentences to deter other corporate executives from engaging in insider trading, but the judge disagreed, reasoning that since Levoff had been terminated, he was no longer in a position to violate securities laws.
