Updated at 12:30 p.m. PST
The U.S. Securities and Exchange Commission says the executive who was in charge of Apple's insider trading policy himself committed insider trading in 2015 and 2016 — in one case, selling off about $10 million in Apple stock in advance of a quarterly earnings announcement.
That executive is Gene Levoff, who was until last year Apple's senior director of corporate law and corporate secretary. According to a complaint filed Wednesday in U.S. District Court in New Jersey, as head of the company's corporate law group, Levoff was responsible for ensuring compliance with Apple's insider trading policy, as well as determining the criteria for those employees — including himself — restricted from trading around quarterly earnings announcements.
But the SEC says that on at least three occasions in 2015 and 2016, Levoff used inside information about Apple's finances to avoid losses or make a profit for himself by trading Apple stock:
"For example, in July 2015 Levoff received material nonpublic financial data that showed Apple would miss analysts' third quarter estimates for iPhone unit sales. Between July 17 and the public release of Apple's quarterly earnings information on July 21, Levoff sold approximately $10 million dollars of Apple stock — virtually all of his Apple holdings — from his personal brokerage accounts. Apple's stock dropped more than four percent when it publicly disclosed its quarterly financial data. By trading on this material nonpublic information, Levoff avoided approximately $345,000 in losses."
The Department of Justice also announced it has charged Levoff with one count of securities fraud. The criminal charge carries a potential penalty of 20 years in prison and a $5 million fine.