Former Apple Lawyer Who Was Supposed To Keep Employees From Insider Trading Has Been Charged With Insider Trading (cnbc.com) 63
The SEC Wednesday charged a former Apple executive with insider trading. From a report: Gene Levoff, senior director of corporate law and corporate secretary until September, "traded on material nonpublic information about Apple's earnings three times during 2015 and 2016," according to the lawsuit filed Wednesday in the U.S. District Court of New Jersey. "Levoff also had a previous history of insider trading, having traded on Apple's material nonpublic information at least three additional times in 2011 and 2012. For the trading in 2015 and 2016, Levoff profited and avoided losses of approximately $382,000," the complaint says. Levoff's position at Apple granted him insider access to not-yet-public earnings results and briefings on iPhone sales, the complaint says. On more than one occasion, he disobeyed the company's "blackout" period for stock transactions, selling or buying stock worth tens of millions of dollars, according to the SEC.
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That and the outsider would spend a lot of time trying to figure out what the insiders are doing.
Look all these Apple employees buying stock, that means we should buy it too. (a good way to raise the rates)
Look all these Apple employees selling stock, SELL! SELL! SELL! Then all those Apple Employees buy the stock right back at a discount, moments before Apple releases the iDevice X4.
Stock Prices should me controlled by the "Invisible Hand of capitalism". However people found a way to trick it, thus we now
Re: Illegal for a reason ... (Score:1)
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Quis custodiet ipsos custodes? [wikipedia.org]
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we don't jail the rich.
What would the other rich think?
Misuse (Score:5, Interesting)
I worked for a seedy outfit that repeatedly manipulates it's share prices. One day, the boss called everyone into a mandatory, absolutely must attend staff meeting. So, we go in and listen to a bunch of the usual b.s. Then he plops a market share comparison of our outfit and our major competitor based in Toulouse. It looked pretty bad (for us). He then informed us that the chart he had shown us was considered 'material non-public information' and we were now prohibited from selling any of our company stock for a defined period. No surprise, our company stock tanked.
We didn't need to see this chart to do our daily jobs. It was just a maneuver to keep employees from heading to the exits with the rest of the market watching.
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then how do you know the market share of your competitor
Industrial espionage.
Re: Misuse (Score:1)
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Without that information there would be no reason for "heading to the exits"
Workers can often tell when a company is in trouble. That might still be considered inside information. But gut feelings are a lot less likely to attract SEC attention than actual internal documents.
free to panic-sell with the rest of the market
The rest of the market includes a lot of people who can afford portfolio managers who can act on a press release within minutes. I can't get off the assembly line to a phone until break time. I'd be selling into the bottom of the market.
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Nah, that'd never happen. Apple and Google are struggling financially, right?
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Imagine the temptation (Score:2)
Re:Imagine the temptation (Score:5, Insightful)
It shouldn't be as tempting when you're a highly paid corporate lawyer, wealthy enough to play with 8 digits' worth of stocks...but that's the difference between regular greed and insane greed I guess.
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Except that greed begets more greed, and anybody telling you how the "free market" solves these problems is lying to you. The more wealthy you are, the more you feel entitled to dip your beak, because you are special and privileged.
Human nature tells us that people are selfish assholes only out for their own interests. Any economic or social theory which says that doesn't happen is
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Sorry, but you should rephrase that slightly to:
Human nature tells us that some people are selfish assholes only out for their own interests.
Even that's an overstatement, though sometimes it's hard to believe.
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It is not the ism, it is the psychopaths who plot and scheme to gain control of the ism. Can be quite readily stopped, simply introduce testing for psychopathy and act accordingly and the majority of problems will stop, as easy as that. Doesn't ,matter what you create a psychopath will seek to gain control of it and run it to feed their own greed, ego and lusts through to collapse of the ism, every single time, the ism lasts until a psychopath gains control of it.
Re: Imagine the temptation (Score:4, Insightful)
That would seriously leave few current CEOs in office. Think about how many are considered "eccentric," and that "eccentric" just means "crazy but wealthy." And then consider that most of the apparently level-headed ones are also psychopaths. If CEOs were hired on merit they would indeed be required to undergo mental health evaluations to get that position.
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I think Apple folows the simular logic. (Score:5, Insightful)
Just as we tech people say. Lets hire a convinced black hat hacker, as your IT security expert, because they would know how it is done. Lets hire a lawyer convicted in insider trading to stop other employees from doing it, because he knows how it is done.
There are two problems witch such logic.
1. the Convicted part: They got caught... So how good can they be.
2. They have shown a history of poor ethical thinking skills. Such jobs with high level of responsibility and general access to information, a strong ethics background is needed.
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The problem is, even in my job, I need to be conscious of my personal ethics all the time. They are so many things that I could get away with, which I don't attempt due to my ethical standard. And usually a few times a week, I need to ask myself, what it the Right thing to do. Not the Best thing to do.
You need to be sure that you do do not cross the line, and the sliding scale is easy to tip. Small lapses makes it easier to do larger lapses, until you have crossed the line, or if your lucky got close enou
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I think the problem with this witch logic is that it frames people as immutable being, incapable of growing or changing in a positive manner from prior experiences.
For every bad apple that doesn't reform themselves, I think there are likely more "reformed apples" that improve themselves and change for the better. In some ways, I think reformed people may become even more averse to the original behavior than an average person who never exhibited that behavior.
I think a "reformed criminal" can very much
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Re:I think Apple folows the simular logic. (Score:4, Informative)
Just as we tech people say. Lets hire a convinced black hat hacker, as your IT security expert, because they would know how it is done. Lets hire a lawyer convicted in insider trading
You've got your facts wrong; he's never been convicted. The CNBC article and Slashdot summary are rather ambiguous in their phrasing, hence your understandable confusion, but if you check other [businessinsider.com] reporting [appleinsider.com] on the story, you'll see that what's actually going on is that he's just now being accused of crimes committed in 2011 and 2012, as well as 2015 and 2016. Apple didn't hire a convicted inside trader and he's never been charged with insider trading prior to now.
In fact, so far as Apple's response to his activities go, they put him on a leave of absence last summer when they were first notified that he was being investigated, then fired him themselves a few weeks later when their internal investigation turned up evidence of wrongdoing. The SEC is now following up with formal charges of their own, again, for the first time.
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That's just what they can prove.
Probably the vast majority of stock trades he has ever made was on insider information either acquired himself or from connections, just generally with more deniability. It's easy to get lazy with routine tasks.
It takes one to know one. (Score:2)
I've got some insider info for you (Score:1)
Self sacrifice? (Score:1)
How the worm turned (Score:2)
Meeting objectives (Score:2)
For all I know, if he kept insider trading down to only one employee, maybe that's considered good in this line of work.
Simple Requirement (Score:2)
Require all eligible employees to EITHER:
1). File a buy/sell plan on the first business day of the year. The plan must indicate, by transaction type (buy/sell), amount of stock and transaction date, all of their transactions for that calendar year. Make such plans irrevocable after being filed.
2). Require a 120 day lead time on all transactions, and make them irrevocable once declared.
Do that, and they will have to get a lot more complicated about their insider trading schemes.
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They've got lots of material insider information just from by knowing future tax and regulatory policy, before you get to any required filings by the company or information surveillance agencies have. (So, do black programs get funded via insider trading based on info from intercepts?)
For all of us, in practice this stacks the deck against at least our 401k mutual fund inv