SEC Charges Former Apple Lawyer Gene Levoff With Insider Trading [Updated]

[centauratlas]

That might be a question for Martha Stuart

And Marta Steward didn't even serve time for insider trading. She served it for process crimes related to it - making false statements, obstruction, and conspiracy.

The advice applies to everyone: if the Feds want to speak with you, only do it with an attorney present.

[Edit: Just as @Carnegie above said while I was typing]

 

[Carnegie]

No, not everyone who works at Apple, including lawyers, makes millions of dollars and gets stock options.

In fact very few do.

That's true (about the compensation level, at least).

But, according to the complaint, Mr. Levoff sold about $10 million worth of AAPL (reportedly almost all of his AAPL holdings at the time) in July of 2015. So he likely was compensated pretty well by Apple.

That said, most Apple employees are eligible to receive RSU awards. (Apple doesn't issue stock options anymore.) But, of course, the value of their awards can vary a great deal.

 

[ryanwarsaw]

These guys get compensated millions of $ in salaries and options... why bother risk your job, future employment prospects, maybe disbarment from practicing as a lawyer, maybe jail time, for several hundred $K? Greed.

Yeah this exactly. The guy had $10,000,000 in stocks and took such a stupid risk for such a low short term gain. All he had to do was hold it until summer of 2018. He sold it from his personal account as well. Jeez if you are going to go the crooked lawyer route cover your tracks. I can only wonder what sort of incompetence went on when he was doing his legitimate work with the idiocy of what he did in the article.

 

[luvbug]

Corporate lawyer, VP, at Apple, no less. He was already making a bodacious income, but no, that wasn't enough. Sign of the times, unfortunately.

 

[thadoggfather]

Can someone ELI5 how its somehow *not* insider trading when CEO's sell off tons of stock, 'coincidentally' before some radical change at the company or shift in perception?

Thinking about like Zuckerberg, for example.

Or is it, and these people are just 'above the law'? I dont see how the amount of knowledge they possess doesnt relate to the matter.

 

[Kabeyun]

Tim gets paid a lot of money. He is a big boy. He doesnt need your cheerleading.

Oh. Comments on Cook are out of bounds because of his age and salary. Sorry. Listen up everyone! Can’t talk about Tim Cook in MACrumors forums!!

Thanks for the guidance.

 

[bluespark]

Suppose he is found guilty - would he actually serve serious jail time?

Now imagine somebody steals close to $400K from a bank...

A "guilty" finding is not possible here because this is a civil (not criminal) suit. And he didn't steal the money; rather, he allegedly traded based on information not available to his counterparty (i.e., those buying his stock). A better analogy would be selling a car where you alone knew of an engine problem. That may be a crime, but it's typically much clearer that your buyer should be allowed to recover financial relief. That's what the S.E.C. is mainly after here (disgorgement, with interest).

 

[techwhiz]

Greed.
So he had $10 Million in stock and was trying to avoid marginal losses?
What an idiot... Even I know they look at trades that happen before material news like earning reports and product announcement.

I'm an engineer and have been on multiple official and unofficial blackout lists.
Most companies will send an email that it is "okay to trade".

Once again, he knew better. Don't just throw the book at him; hit him with the whole book!

 

[Carnegie]

Can someone ELI5 how its somehow *not* insider trading when CEO's sell off tons of stock, 'coincidentally' before some radical change at the company or change in perception?

Thinking about like Zuckerberg, for example.

Or is it, and these people are just 'above the law'? I dont see how the amount of knowledge they possess doesnt relate to the matter.

Do you have an example of a particular sale, so that we can consider the circumstances?

Often trades made by corporate executives are pursuant to trading plans such that the decisions to trade certain numbers of shares and/or at certain prices and/or on certain dates were made ahead of time, when the executives didn't have material nonpublic information.

 

[bluespark]

Greed.
So he had $10 Million in stock and was trying to avoid marginal losses?
What an idiot... Even I know they look at trades that happen before material news like earning reports and product announcement.

I'm an engineer and have been on multiple official and unofficial blackout lists.
Most companies will send an email that it is "okay to trade".

Once again, he knew better. Don't just throw the book at him; hit him with the whole book!

Right? Anyone who deals with this type of information in an American company knows that you can't trade on it while the information is non-public. That's even more true of a senior corporate attorney, who no doubt is well-versed in SEC enforcement actions and on the fiduciary duties owed by in-house legal counsel.

Not saying he doesn't have a defense, but this doesn't look good for him.

 

[thadoggfather]

Do you have an example of a particular sale, so that we can consider the circumstances?

Often trades made by corporate executives are pursuant to trading plans such that the decisions to trade certain numbers of shares and/or at certain prices and/or on certain dates were made ahead of time, when the executives didn't have material nonpublic information.

I will admit I'm not up to date on it by any means but

https://www.cnbc.com/2018/07/26/fac...e-stock-than-usual-in-the-second-quarter.html

seems shady surrounding all the facebook blow outs

Even this-
https://www.macrumors.com/2018/08/28/tim-cook-57-million-apple-stock/

Almost like a ton was sold before iPhone release, anticipating a slouch in sales (that is my speculation though, I dont know what's going on in Tim's head at any given moment and dont have any more details than linking to articles)

 

[Carnegie]

I will admit I'm not up to date on it by any means but

https://www.cnbc.com/2018/07/26/fac...e-stock-than-usual-in-the-second-quarter.html

seems shady surrounding all the facebook blow outs

Even this-
https://www.macrumors.com/2018/08/28/tim-cook-57-million-apple-stock/

Almost like a ton was sold before iPhone release, anticipating a slouch in sales (that is my speculation though, I dont know what's going on in Tim's head at any given moment and dont have any more details than linking to articles)

When I get a few minutes I'll look at the first instance you point to.

As for the second instance, that sale by Mr. Cook doesn't seem suspicious. The timing of the sale had to do with when the shares vested. He has shares vest once a year in August. Also, that sale was (according to the Section 16 filing which reported it) made pursuant to a trading plan put in place (or last amended) nearly four months earlier.

 

[thadoggfather]

When I get a few minutes I'll look at the first instance you point to.

As for the second instance, that sale by Mr. Cook wasn't suspicious. The timing of the sale had to do with when the shares vested. He has shares vest once a year in August. Also, that sale was (according to the Section 16 filing reporting it) made pursuant to a trading plan put in place (or last amended) four months earlier.

Wouldm't the plan being four months prior still not negate at least the possibility of insider information and trading? Not that top level people shouldnt be allowed to trade at all whatsoever, but how can they be impartial when they run the company with internal knowledge of what's to come on the roadmap, years out, more than average Joe analyzing headlines and hearsay? Seems like a slippery slope.

Thats what I wrestle with conceptually

 

[nt5672]

Huh? So if I dug a tunnel into a bank vault at night when no one is around - then I can help myself to whatever I want since there is no “violence”?

Depends. Do you work in a high paying management job with lawyers and judges as your friends? If so, then yes you can help yourself to whatever you want. The only downside is if you get caught in such a way that bad PR is generated, media becomes aware, etc. and rubs off on your friends. Then of course they will abandon you quicker than you can blink an eye.

 

[curtvaughan]

No, not everyone who works at Apple, including lawyers, makes millions of dollars and gets stock options.

In fact very few do.

Well, perhaps not everyone, but the top exec's do pretty well:

https://www1.salary.com/APPLE-INC-Executive-Salaries.html

 

[thadoggfather]

"FORMER APPLE LAWYER WHO WAS SUPPOSED TO KEEP EMPLOYEES FROM INSIDER TRADING HAS BEEN CHARGED WITH INSIDER TRADING ★"

saw it on Gruber's diary blog.

Wouldnt this be grounds for a deep probe into employee trading at Apple all together, if the gatekeeper *himself* is corrupt and unaccountable?

Ruh roh!

I laugh that all Gruber has to say is "That’s quite the headline." No, that's quite the story.

He's pathetically brief when its Apple shade, cause he wouldn't wanna be on terms or anything Just like his non-reaction reaction to iPad Pro 2018 bendgate was buried on a podcast, and mostly speaking to how its not concrete and Internet exaggerates everything, more than analyzing with fairness the possibility Apple has actually shipped $1000+ junk

I think I saw him spent an exponential amount more of time fawning over the clear XR case haha! I love that MacRumors fans arent having any of his crap and see through his reality distortion fields (which are down). Imagine if it were Google, what his reaction/the hysteria would be

 

[Carnegie]

Wouldm't the plan being four months prior still not negate at least the possibility of insider information and trading? Not that top level people shouldnt be allowed to trade at all whatsoever, but how can they be impartial when they run the company with internal knowledge of what's to come on the roadmap, years out, more than average Joe analyzing headlines and hearsay? Seems like a slippery slope.

Thats what I wrestle with conceptually

Sure, an insider like Mr. Cook is always going to know far more about what's going on with a company than most outsiders will. So, in a sense, they're always trading with additional information. But it isn't practical to forbid them from trading altogether while they're in executive positions. So we require certain kinds of disclosures and we establish a threshold (an admittedly somewhat vague threshold) for circumstances under which trading isn't allowed.

 

[thadoggfather]

Sure, an insider like Mr. Cook is always going to know far more about what's going on with a company than most outsiders will. So, in a sense, they're always trading with additional information. But it isn't practical to forbid them from trading altogether while they're in executive positions. So we require certain kinds of disclosures and we establish a threshold (an admittedly somewhat vague threshold) for circumstances under which trading isn't allowed.

I'm not a huge fan of regulation as a general concept, but this strikes me as a more-than-lovely opportunity to regulate executives' ability to trade, with that in mind.

 

[darkslide29]

$382,000 out of $10 million in stock? That's less than a 4% profit. Is he really bad at this, or it was a one time thing for him?

 

[m4mario]

Damn. The only way to reliably profit from the stock market is being scrutinized. No wonder people hate government officials. They always play spoil sport. They just can't leave things the way they are. They always have to do something.

 

[thadoggfather]

Imho the company is run by money focused people. What they need is to get the spirit back. They need a technological visionary who loves tech and is able to translate that into products that people will love. If they manage that again, the products will sell itself.

Every thing Apple is doing today has one focus: DOES IT PRODUCE ENOUGH PROFITS.

With such a mentality you’re not able to build a good relationship with customers.

Things need to change and I really believe Apple will be forced to change by competitors.

They remind me of Sony; a shell of their former selves.

I dont see how people can either maintain he is a tech visionary, or admit that he isn't and say 'but doesnt matter because iPhones sell great anyways.' Of course it matters, most of us that post here do so because we're enthusiasts, not bean counters..

 

[cmaier]

Imho the company is run by money focused people. What they need is to get the spirit back. They need a technological visionary who loves tech and is able to translate that into products that people will love. If they manage that again, the products will sell itself.

Every thing Apple is doing today has one focus: DOES IT PRODUCE ENOUGH PROFITS.

With such a mentality you’re not able to build a good relationship with customers.

Things need to change and I really believe Apple will be forced to change by competitors.

Yeah, I miss the old days when Steve Jobs and his team didn’t care about profits.

Oh, wait...

 

[WannaGoMac]

Another reason android is better than iOS... and this wouldn't happen if Steve were in charge /s

 

[9081094]

Yeah, I miss the old days when Steve Jobs and his team didn’t care about profits.

Oh, wait...

There is nothing wrong with making profits. But there’s a limit, crossing it it’s called greed.
Apple products have always been expensive but you could rest assured that you got the best of the best in hard- and software or at least similar priced to high end competitors.

Today the greediness has gotten totally out of control imho. From a cable to ram, from a keyboard to an iPad Pro. Old hardware is being sold as if it was introduced yesterday.

Cook & Co don’t earn my trust anymore and when companyleaders show that mentality it sure isn’t a surprise others in ranking follow suit.

 

[cmaier]

There is nothing wrong with making profits. But there’s a limit, crossing it it’s called greed.
Apple products have always been expensive but you could rest assured that you got the best of the best in hard- and software or at least similar priced to high end competitors.

Today the greediness has gotten totally out of control imho. From a cable to ram, from a keyboard to an iPad Pro. Old hardware is being sold as if it was introduced yesterday.

Cook & Co don’t earn my trust anymore and when companyleaders show that mentality it sure isn’t a surprise others in ranking follow suit.

When was it you could “rest assured?” The original Mac that didn’t ship with a reasonable amount of RAM? The mac cube that cracked when you used it? The 2013 MBP’s with mainboards that need to be replaced every two years due to graphics chip solder cracks? The “you’re holding it wrong” iPhones? The iOS 6 maps?

If we’re going to “Make Apple Great Again” I’m just curious what year we’re talking about.