Former Top Apple Lawyer Pleads Guilty To Insider Trading (cnbc.com) 26
The former top corporate lawyer at Apple pleaded guilty to insider trading charges, for what prosecutors called a five-year scheme to trade ahead of the iPhone maker's quarterly earnings announcements. Gene Levoff, 48, of San Carlos, California, pleaded guilty to six securities fraud charges at a hearing before U.S. District Judge William Martini in Newark, New Jersey. From a report: Levoff allegedly exploited his roles as corporate secretary, head of corporate law and co-chair of a committee that reviewed drafts of Apple's results to generate $604,000 of illegal gains on more than $14 million of trades from 2011 to 2016. Prosecutors said Levoff ignored the quarterly "blackout periods" that barred trading before Apple's results were released, as well as the company's broader insider trading policy -- which he was responsible for enforcing. "Gene Levoff betrayed the trust of one of the world's largest tech companies for his own financial gain," First Assistant U.S. Attorney Vikas Khanna in New Jersey said in a statement.
The Apple... (Score:1)
Re:The Apple... (Score:4, Interesting)
I may be misremembering, but I seem to recall that Apple actually forwarded the case to the feds for criminal prosecution of their own volition after catching him in an internal investigation. I think they fired him before the SEC ever opened its own investigation.
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And I hope he immediately got disbarred under the ethics clause..
Doesn't seem to be mentioned anywhere.
Re:The Apple... (Score:4, Informative)
Disbarment would require a separate proceeding by the state bar. The judge can't just order disbarment as part of sentencing. Disbarment proceedings wouldn't even begin until after being convicted of a crime.
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He already plead guilty, and there should've been a preliminary investigation, so at this moment there's no reason to not throw the book at him.
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State bars typically don't have the resources to perform a separate parallel investigation to a pending criminal proceeding. They are a professional licensing board, not the FBI. Moreover, there's no particular reason why he needs his law licensed yanked immediately. He's not going to practice law from prison. However, a felony criminal conviction would certainly trigger disciplinary proceedings in pretty short order that would likely lead to disbarment such that he won't be practicing law upon release.
Throw the book at em (Score:2)
But probably what will happen is his friends his riches will get him off the hook proving once again that if you are rich the rules don't apply to you
Re: Throw the book at em (Score:2)
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But probably what will happen is his friends his riches will get him off the hook proving once again that if you are rich the rules don't apply to you
If you don't want the rules to apply to you run for congress, they seem to be able to insider trade as much as they want without suffering consequences.
That level of risk (Score:5, Insightful)
Re:That level of risk (Score:5, Interesting)
to make 600k? Thats it? Really?
Yeah - on $14m in trades? My guess is he's copping to a lesser crime either as part of a deal or to throw the regulators off the scent.
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The psychology of money is really quite fascinating. At a certain point it becomes almost an obsession to get and maintain as much wealth as possible. Sort of a Scrooge McDuck penny pinching miser. They don't necessarily think the same way we do, like "do I really need an extra $600K? is it worth the risk?"
What I'd like to see is this guy be sentenced to some kind of community service working for the SEC to help identify and build cases against other people conducting insider trading schemes. Plus giving up
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As a lawyer who is privy to insider information (and subject to blackout periods), I have to say that having that information is often not all it's cracked up to be. Even if I had no morals or fear of being caught, I'm not certain I could make all that much money trading during blackout periods.
I can't tell you how many times I've thought my company would zoom up after earnings release only to have a muted (or even negative) market response. Alternatively, I've expected the stock to tank after bad news, onl
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The concept that's applicable is "The Whisper Number"
https://www.investopedia.com/t... [investopedia.com]
The only times you will see major stock moves from the actual quarterly/announced numbers is when they surprise everyone else who has been operating on the whisper numbers.
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Sometimes you will also see major stock moves that have nothing to do with the company itself. For example, suppose you release earnings on a day your whole sector is crashing due to some external circumstance. Even if you have a handy earnings beat, the result might just be that you crash a little less than your competitors. If you are an insider who knows that there's going to be a massive earnings beat that's beyond the whisper numbers, you can still be burned by buying a bunch of shares immediately befo
Not very good at it... (Score:3)
Only 600k gains on more than 14 million in trades. Guy is probably going to prison with an illegal return of 4.3%. I guess he should have just invested the money in Google.
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Prison for financial crimes? Jordan Belfort the Wolf of Wallstreet guy got two years in minimum security for hundreds of millions in fraud.
Re: Not very good at it... (Score:3)
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Only 600k gains on more than 14 million in trades. Guy is probably going to prison with an illegal return of 4.3%. I guess he should have just invested the money in Google.
While I agree that at ~100k a year makes you wonder, WTF? You're racking in a lot more from Apple on salary, options, benefits as their top corporate lawyer, as well as positioning yourself for a CEO slot somewhere if you want it. However, his return was likely larger as that is in trades, not total investments. If he traded ~$1 million each quarter for 5 years he could easily do $14 mill in trades with the same $1mill while netting $600K in profits, for a 60% return. OTOH, $1mill in Google over that peri
It's illegal to impersonate a member of Congress (Score:5, Funny)
In this case by emulating their behavior.
$640k is enough money (Score:2)
Nature (Score:2)
You can't change nature. Insider trading will happen as long as insider information exists. It would be a lot better to acknowledge this, and acknowledge that the stock market is a rigged game, and do away with insider trading laws. Note they don't apply to Congress. Haha.
Prison time? (Score:2)
No? Well that would be worthless!