February 23, 2019 at 18:21

Apple's top manager was accused of insider trading. He had to fight her



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    The Securities and Exchange Commission and the US Department of Justice have charged insider trading against a former senior Apple official . Daniel Levoff worked as a leading lawyer in the company and had access to reporting before its publication.

    Despite the fact that the duties of Levoff included the fight against insider trading, he used the information available to him for operations with Apple shares. For example, before the publication of the report on iPhone sales decline, Levoff sold shares for $ 10 million.

    Disclosure Committee and Blackout period


    Levoff was one of the most senior lawyers in the company and reported directly to the board of directors. He led a team of more than 30 lawyers. The manager worked for the company for more than ten years, and since 2008, along with Apple's senior management, was a member of the so-called “disclosure committee” - its members gain access to the company's reports and press releases before they are published.

    American public companies have a rule according to which employees (insiders) are prohibited from performing transactions with shares in a certain period before and after the publication of reports - it is called blackout period. One of Levoff's tasks was to monitor compliance with this rule. However, the lawyer himself during the blackout period made transactions with Apple shares. According to the US Department of Justice, this allowed him to earn $ 227 thousand from 2011 to 2016 and avoid losses of $ 377 thousand.

    The documents of the Securities Commission and the Ministry of Justice contain descriptions of several cases of insider trading by Levoff.

    For example, in 2015, he got access to a report with figures on iPhone sales. The results were lower than those expected by analysts. Learning about this, the top manager sold Apple shares for $ 10 million. After the report was published, the share price fell by 4% and the company's capitalization decreased by $ 32 billion. Only this one case allowed Levoff to avoid losses of $ 345 thousand.

    What awaits an insider


    After Apple learned of allegations against an employee in the fall of 2018, he was fired. In addition, Levoff faces imprisonment of up to 20 years and a fine of up to $ 5 million. The Securities Commission demands to fine him and prohibit the former top manager from working as an official in public companies.

    The Securities and Exchange Commission regularly charges insider trading with employees of public companies. According to the Financial Times, last year 56 such cases were reported - this is about 10% of all charges against individuals.

    At the same time, the case of Levoff stands out among others - not every day accusations of insider trading are presented to top managers who must fight it.

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