Picture: REUTERS
Picture: REUTERS

New York — Former Apple lawyer Gene Levoff has been indicted for securities and wire fraud, more than eight months after he was charged with trading on non-public information.

Apple fired Levoff in September 2018 after placing him on leave two months earlier, according to a filing in a related lawsuit by the US Securities and Exchange Commission (SEC). Over his decade-long career at Apple, he was one of the most senior executives, reporting directly to the general counsel.

Levoff, who served as Apple’s senior director of corporate law, is accused of repeatedly trading on information about revenue and earnings dating back to 2011. The illegal investments led to about $227,000 in profits, while allowing him to avoid $377,000 of losses, according to prosecutors in New Jersey.

In one example, detailed in the SEC’s case, Levoff learned that Apple would not meet analysts’ third-quarter forecast for iPhone sales in July 2015 and sold about $10m of Apple stock, or almost all of his holdings, allowing him to avoid losing about $345,000 when the company’s shares plunged more than 4% after announcing its numbers.

“We look forward to vigorously defending Mr Levoff with respect to these allegations,” his lawyer, Kevin Marino, said in an e-mail.

The allegations are a black eye for Apple, which said after Levoff was charged that it was reviewing policies implemented to prevent illicit share transactions. The company has had a mostly clean record on financial reporting issues since shareholders accused its co-founder and former CEO Steve Jobs of options backdating in the mid-2000s. A special board committee led by former US vice-president Al Gore cleared Jobs of misconduct.

Levoff was responsible for making sure that employees complied with the company’s insider-trading policy, and implemented an update of the procedures in 2015, the SEC said in its suit. He even sent an e-mail to workers — all in caps — in 2011 reminding them that they weren’t permitted to trade shares based on non-public information.

As a member of Apple’s “disclosure committee”, he had permission to review quarterly and annual reports, and press statements before they were released to the public. Prosecutors said he would read through internal documents he obtained as a member of that group and make trades in his personal brokerage account at TD Ameritrade.

Bloomberg