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Former Apple Lawyer Who Was Supposed To Keep Employees From Insider Trading Has Been Charged With Insider Trading (cnbc.com)

Posted by msmash on from the how-about-that dept.

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.

31 of 63 comments (clear)

  1. Imagine the temptation by timeOday · · Score: 1

    Push this button, and you will make millions. More than in two lifetimes of honest work.

    1. Re:Imagine the temptation by GameboyRMH · · Score: 4, 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.

      --
      "When information is power, privacy is freedom" - Jah-Wren Ryel
    2. Re:Imagine the temptation by Anonymous Coward · · Score: 2, 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

      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 a complete fucking lie.

      Which in my book is capitalism, communism, and most religions because they all seem to be predicated on deluding yourself into believing that people aren't intrinsically assholes by their very nature.

      You can't go around claiming your -ism works when you have fundamental assumptions which defy logic and reality about what people really do.

      I fail to see why a highly paid corporate lawyer would be any less tempted to be a lying selfish asshole. In fact, I consider it more likely.

    3. Re: Imagine the temptation by GameboyRMH · · Score: 3, 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.

      --
      "When information is power, privacy is freedom" - Jah-Wren Ryel
    4. Re:Imagine the temptation by 110010001000 · · Score: 1

      100% insightful

    5. Re:Imagine the temptation by HiThere · · Score: 1

      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.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    6. Re:Imagine the temptation by gravewax · · Score: 1

      except that is not the position he is in at all. He is already a very rich and successful lawyer at the top of his career with enough investment that the insider trading saved him over $300k. I am no where near that level yet but I would not be tempted for even a second to risk everything I earned in life plus destroying my future and a potential jail term to avoid making what for him was a relatively small lose on the markets.

    7. Re:Imagine the temptation by rtb61 · · Score: 1

      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.

      --
      Chaos - everything, everywhere, everywhen
  2. I think Apple folows the simular logic. by jellomizer · · Score: 4, 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.

    --
    If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    1. Re:I think Apple folows the simular logic. by jellomizer · · Score: 2

      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 enough to see the edge.

      You could be honest and say I will never do that again... However over time if you have a poor ethical self perception, you will start sliding back into your activities.

      Oddly enough White Collar crime is more prone to reoccurrence and harder to stop. Because for a lot of the blue collar crimes, if you take the person out of the environment they can get better.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    2. Re:I think Apple folows the simular logic. by PseudoThink · · Score: 1

      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 be a "convert", and consequently much less likely to make future offenses. However, that's not everyone, so then you get this scenario, too.

    3. Re:I think Apple folows the simular logic. by Anubis+IV · · Score: 3, 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 reporting 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.

    4. Re:I think Apple folows the simular logic. by gravewax · · Score: 1

      No it doesn't frame them as such at all. It frames them as a high risk as they have already proven that given the right temptation their ethics and moral compass are "flexible". maybe it is a once off, maybe not. But you know they have failed at least once so the responsible thing to do is ensure they are not in a position with such temptations again. It doesn't mean don't hire them or use their knowledge, but ensure it is properly supervised with no such tempations.

  3. Re:Illegal for a reason ... by jellomizer · · Score: 1

    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 need laws to stop all the tricks.

    --
    If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  4. Re: Illegal for a reason ... by dougdonovan · · Score: 1

    do what i say, not what i do.

  5. It takes one to know one. by grep+-v+'.*'+* · · Score: 1

    What's the problem? It's only money.

    --
    If the universe is someone's simulation -- does that mean the stars are just stuck pixels?
  6. Re:Illegal for a reason ... by jriding · · Score: 1

    we don't jail the rich.
    What would the other rich think?

    --
    love the taste, hate the texture
  7. Misuse by PPH · · Score: 4, 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.

    --
    Have gnu, will travel.
    1. Re:Misuse by PPH · · Score: 1

      then how do you know the market share of your competitor

      Industrial espionage.

      --
      Have gnu, will travel.
    2. Re:Misuse by Dorianny · · Score: 1

      That doesn't make much sense. Without that information there would be no reason for "heading to the exits" and once the information was released you would have been free to panic-sell with the rest of the market

    3. Re:Misuse by PPH · · Score: 1

      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.

      --
      Have gnu, will travel.
    4. Re:Misuse by Spamalope · · Score: 1

      And companies that can simply spy on that information. Possibly that can see everything certain handheld devices contain, can get that information without running afoul of the rule. Possibly. But if that were happening, the companies in that position would profit so much they'd be rich cash cows.

      Nah, that'd never happen. Apple and Google are struggling financially, right?

    5. Re: Misuse by EricSchatz · · Score: 1

      Itâ(TM)s non-public information because they subscribe to industrial tracking services that charge a fee for the share info. Just like the competitors do.

    6. Re: Misuse by gravewax · · Score: 1

      That is still considered public information, if you can source the information from a service be it free or otherwise it is public. Non-public market information is reserved purely for information about the company that would have a material affect on the share price that can only be obtained internally to the company.

    7. Re:Misuse by gravewax · · Score: 1

      given the information described isn't actually non-public sensitive information yeah the SEC would have done nothing. If it was something like unpublished financial numbers not yet released to the public that would be a whole other situation.

  8. Re: Illegal for a reason ... by Zontar+The+Mindless · · Score: 1

    Quis custodiet ipsos custodes?

    --
    Il n'y a pas de Planet B.
  9. Re:$382k/2 years? by Pinky's+Brain · · Score: 1

    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.

  10. How the worm turned by DaMattster · · Score: 1

    This is a little bit shocking. Say goodbye to membership to the bar and law license.

  11. Meeting objectives by Livius · · Score: 1

    For all I know, if he kept insider trading down to only one employee, maybe that's considered good in this line of work.

  12. Simple Requirement by registrations_suck · · Score: 1

    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.

    1. Re:Simple Requirement by Spamalope · · Score: 1

      Remove insider trader exemptions from members of Congress while you're at it. (and anyone else in the Gov't who might have information)
      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 investments.