Apple's guy in charge of stopping insider trading guilty of … insider trading One of Apple's most senior legal executives, whom the iGiant trusted to prevent insider trading, has admitted to insider trading. Gene Levoff pleaded guilty to six counts of security fraud stemming from a February 2019 complaint, according to a Thursday announcement from the US Department of Justice on Thursday. Levoff used …
This post has been deleted by its author
He was selling Apple stock he owned, not buying options. It isn't like Apple has ever made an announcement so bad the stock fell by double digits or anything, so insider trading in Apple stock isn't even all that valuable.
If he held that much stock he was obviously very well compensated. Not only does he lose that high paying job he loses his freedom. All because he was greedy for another half million on top of the millions he already had.
A small payday in that world, a relative fortune to many other people. What's amazing is that a senior legal executive at such a huge company could ever convince himself that there was nothing wrong in doing this. It's the most basic thing to know about, but having that $10 million in stock evidently blinded him to the fact that the rules applied to him too. And he should also have known that his life would become much more unpleasant as a result of what he did, and that his feeble defence that there was nothing wrong with it would fail.
The supposedly mould-breaking world of Silicon Valley executives shows itself to be just the same as the old Masters of the Universe of Wall Street, once the sums involved get big enough and the temptation to unfettered greed becomes irresistible to some.
What's amazing is that a senior legal executive at such a huge company could ever convince himself that there was nothing wrong in doing this.
You may consider that amazing. I do not.
Apple has got itself into its position by astoundingly unethical behaviour. They may have so many lawyers that it was never found to be illegal but it seems to have set a fine example for its staff. He just didn't have enough of a legal time behind him!
The rules don't apply to senior executives because they never get caught and if they do get caught they don't face any consequences.
It's why you get more of everything naughty, from sexual abuse to expense fiddling at the top.
See also prize winning economic studies on bagel honesty boxes
Yeah, seemed odd. $10m in shares sold just save $345,000 in losses when he was in the perfect position to know that Apples shares were on an overall upwards trajectory. All he had to do was wait and he'd have recovered the relatively small loss in a relatively short time. After all, this was money locked away, untouchable with no dividends paid out, literally "paper wealth" unless cashed in. Unless he was cashing in smaller amounts for spending money and desperately needed to maintain the "capital" balance, I'll assume he got annual share options as bonuses/pay package or something.
However he did try (and fail) to have the case overthrown last year, by arguing there was no specific criminal law barring insider training.
That's one claim I've not heard before from an inside trader. If he didnt think it was illegal, then what did he think his job was in informing people about not being allowed to trade during blackout periods? PR?
Careful that he doesnt try and take that claim all the way to the Supreme Court, with the way there ruling right now, they'd probably declare banning Insider Trading was against his freedom of speech or some other such bollocks.
I was once informed that I was an employee subject to the now superseded Model Code in the uk. https://uk.practicallaw.thomsonreuters.com/7-107-6854?transitionType=Default&contextData=(sc.Default)
I was unusual in that I’d bought shares in the company (a plc) and wasn’t an executive. Company top legal exec (lawyer) along with an HR person tell me that I can’t buy more or sell my existing shares at certain points. Hand me a copy of the code and says that if I do I’m insider trading which isn’t a victimless crime. Then the lawyer says that he has to inform me of this because it’s a company rule, despite the fact that he knows I’m highly unlikely to do this.
My manager who has no idea why I have been called to see the “lawyer” was nervous when I got back. He had been sweating it for the time I was away and almost collapsed when I told him it was nothing to worry about. He was thinking of leaving, was concerned that senior people had found out and thought I was being grilled about this.
If he was informed by the company that it was a crime then his legal defence will surely be a little shaky. Now what was his job again………?
Yes there is a law:
17 CFR § 240.10b5-1 - Trading “on the basis of” material nonpublic information in insider trading cases.
Affirmed by U.S. v. O’Hagan, 521 U.S. 642 (1997)
Also an SEC Regulation:
Rule 10b-5 Prohibition on Insider Trading. SEC Rule 10b-5 prohibits corporate officers and directors or other insider employees from using confidential corporate information to reap a profit (or avoid a loss) by trading in the Company's stock.
He should have been fired for incompetence.
I never ceased to be amazed by these stories about people who already have more than enough money by any normal standards, yet risk it all for a comparatively small amount more.
It seems that for some people there is no such thing as enough, and they convince themselves that anything is OK to get more.
Compare also: Martha Stewart.
A (distant) family member who won't be named, as she was dumping enough stock to ruin a small company... "You don't get rich by being nice or playing by the rules".
Thank god I'm an ocean away, people like that... will never have enough and will happily destroy anything in order to get more. It's more than simple greed, it's like some sort of psychological problem.
Very true. My wife and I are comfortably upper-middle-class, in fact in the top 1% for household income of the states we've lived in (though not near it for the US as a whole) – which means we're quite wealthy indeed by global standards – and we follow the rules.
I have a good friend who's quite wealthy thanks to a lot of hard work by himself and by his father before him; he's in commercial real estate and he (and his father before him) has a longstanding practice of working with distressed clients to keep them afloat until they can start making rent payments again. It's all worked out quite well.
Another acquaintance who is bona fide rich (as in "owns several homes, some of which he's only been to once or twice, works by famous artists, etc") has not, to the best of my knowledge, broken any laws or been particularly nasty or underhanded. He just started with some family money, innate intelligence, and an excellent education, and then pursued becoming rich with considerable vigor. Yes, the family money is an important starting point, but it's not necessary to be vile in order to be rich. That's just a rationalization used by people who want an excuse to behave badly.
"people who already have more than enough money by any normal standards, yet risk it all for a comparatively small amount more"
That's most probably how they got 'more than enough' in the first place. A very wise man once said "it's commonly said that power corrupts, but few stop to think that while you're powerless it's hard to show how corrupt you already are". Substitute 'money' for 'power' and much the same applies. Almost no-one ever got seriously rich by being entirely honest.
Selling ten mil illegally to prevent losing 3%ish of value. So if he had followed the rules he’d have had roughly $9.6mil still … which would be worth a whole heap more today. These tools always seem to make these dodgy moves to save tiny amounts of money. Must be a whole different world they live in to act so stupidly and greedily when jail is a risk.
Must be a whole different world they live in to act so stupidly and greedily when jail is a risk
Obviously he thought as the guy in charge of exposing insider trading within Apple that if he did it there would no one to expose him!
Apparently there is someone who watches the watchers after all, at least in his case.
This post has been deleted by its author
Stupid idiot.
However, there is part of me that thinks about the human condition, that if I had money* it would be really hard to just sit on my hands and wait to lose $250k.
It would be interesting to know if this person was a named employee within the insider trading scheme. Directors, accountants and Chief Legal officers would typically be registered and monitored for such things, particularly during a blackout trading window. Presumably he thought he could get away with it because he wasn't named or being actively monitored.
It's more common than we like to think. Hell, after the whole debacle of Nancy Pelosi's hedge fund husband trading on her apparent knowledge, even the politicians seem to do it.
*I do not have the money.
"Presumably he thought he could get away with it because he wasn't named or being actively monitored."
On the other hand, I'd not be surprised to learn that ANY large transaction during a "blackout period" is looked at more closely than usual. After all, look how many insider traders have been caught getting others to do the trades for them, eg friends and/or family. I'd imagine even with a company the size and value of Apple, $10m trades don't happen all that frequently, especially close to an earnings/performance announcement.
The simplest analysis is not that he's a vile opportunist, grabber of money while trampling the poor underfoot, nor any of that...
It's simply that he's an incompetent idiot.
Or that he had a giant payment to be made to someone with a trusty squad of knee-breakers to hand.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
