Insider trading was acknowledged by a former top Apple lawyer who was in charge of upholding the company's anti-insider trading regulations. The scheme lasted for five years.
Gene Levoff, formerly the co-chair of Apple's disclosure committee, entered a guilty plea on Thursday in a federal court in New Jersey to six counts of security fraud involving trades totaling more than $14 million that he made between 2011 and 2016.
Levoff, 48, worked for Apple as a senior director from 2013 to 2018 after serving as a director of corporate law from 2008 to 2013. Federal prosecutors brought charges against him in 2019.
Prosecutors claim that Levoff's membership on the disclosure committee gave him access to Apple's quarterly profit reports before they were made public.
Levoff was allegedly prohibited from trading while in possession of privileged information during specific "blackout periods," but he "ignored" the limitations and "repeatedly executed trades based on material, nonpublic information without Apple’s knowledge or authorisation," according to the justice department.
Levoff acknowledged that he frequently traded on confidential information. He made a total profit of $604,000 from gains realized and losses averted.
The maximum sentence for each of the six counts of securities fraud is 20 years in prison and a fine of $5 million. November 10 is the date set for sentencing.
A civil lawsuit against Levoff has also been brought by the Securities and Exchange Commission.
Kevin Marino, Levoff's attorney, declined to comment.
According to Vikas Khanna, the US attorney for New Jersey, Gene Levoff betrayed the trust of one of the biggest tech companies in the world in order to further his own financial interests. “Despite being responsible for enforcing Apple’s own ban on insider trading, Levoff used his position of trust to commit insider trading in order to line his own pockets.”
Levoff had been "gaming the system," according to acting FBI special agent Terence Reilly, and was a "threat to the viability of our markets."
"The average American, whose retirement savings is invested in these companies, has every right to expect that rules are being followed, the game is being played fairly, and their nest egg is safe from profiteers who willingly sidestep the rules to improve their own financial future at the expense of others," according to Reilly.
Requests for comment from Apple were not answered.
By fLEXI tEAM