The Securities and Exchange Commission filed a lawsuit against a former Apple executive Wednesday, alleging he exploited his position as a high-ranking attorney to illegally trade Apple stock before the company disclosed its quarterly earnings report to investors.
Gene Levoff, Apple’s former senior director of corporate law and corporate secretary, “violated the duty of trust and confidence he owed Apple and its shareholders,” states the SEC’s complaint, which was filed in U.S. District Court for the District of New Jersey.
The SEC alleges Levoff, on at least three occasions in 2015 and 2016, traded Apple stock relying on insider information. In one instance, in the summer of 2015, Levoff learned Apple would miss its quarterly estimates for iPhone sales, and before those results were publicly disclosed, he sold about $10 million worth of Apple stock from his personal brokerage account, the SEC alleges, which amounted to virtually all of his Apple holdings.
“Levoff breached his duty of confidentiality to Apple and its shareholders and exploited corporate information for his own benefit,” the lawsuit states. “Through his illegal insider trading in 2015-2016, Levoff profited and avoid losses of approximately $382,000.”
Levoff’s attorney, Kevin Marino, told The Washington Post that Levoff was a highly regarded senior executive at Apple for many years and had never been accused of wrong doing. “We are in the process of reviewing the civil and criminal allegations against him and look forward to defending him with respect to those allegations,” Marino said.
The SEC declined to comment.
As the head of Apple’s corporate law office, Levoff was in charge of ensuring that employees complied with the company’s policy on insider trading, the SEC said in the complaint. He also received material nonpublic information about Apple’s finances as a member of the company’s disclosure committee.
The SEC alleges Levoff has a history of insider trading beyond the three instances over 2015 and 2016. In three cases, in 2011 and 2012, Levoff bought thousands of shares in Apple before the company disclosed positive earnings reports and then sold them after the favorable news went public. In those instances, the lawsuit states, Levoff made about $245,000 in profit.
In a statement to The Post on Wednesday, Apple said: “After being contacted by authorities last summer we conducted a thorough investigation with the help of outside legal experts, which resulted in termination.”
According to the lawsuit, Apple placed Levoff on leave in July and then fired him in September.
The SEC asked the court to enter a judgment against Levoff, finding that he violated federal securities laws; ordering that he pay back the profits he made and the losses he avoided from alleged insider trading, and pay a civil penalty of three times that amount; and banning him from serving as an officer or director of a public company.