The SEC has filed a lawsuit against former Apple lawyer Gene Levoff that accuses him of insider trading.
The government claims Levoff used confidential knowledge about the company to buy or sell shares ahead of company earnings announcements in 2015 and 2016. He profited and avoided US$382,000 in losses, according to a federal complaint filed Wednesday in New Jersey.
Levoff, who lives in California, worked for Apple as a corporate lawyer from 2008 until he was fired last year, according to court documents. He was senior director of corporate law when the SEC claimed he illegally traded his Apple stock. Levoff was responsible for ensuring that Apple employees complied with the company's insider trading policy, according to the complaint.
For example, Levoff sold about US$10 million worth of Apple stock in July 2015 after he received nonpublic financial information that showed the company would miss Wall Street's quarterly forecasts, according to the complaint. Apple's stock dropped more than 4 percent when the company released that quarter's earnings to the public.
By trading on that data, Levoff avoided about US$345,000 in losses, the SEC claimed.A few months later, Levoff bought more than US$1 million worth of Apple shares after he received confidential information about the next quarter's financials, according to court documents. When that data became public, the company's share price rose 4 percent.
The following April, ahead of quarterly earnings, Levoff sold 'virtually all of the Apple shares' in his personal account, the SEC said.
'By selling over 4,000 Apple shares just six days earlier — during the blackout period when he knew that Apple was about to disclose its first revenue decline in thirteen years — Levoff avoided approximately US$32,000 in losses,' the complaint said.
Kevin Marino, an attorney who is representing Levoff, told CNN Business that he and his firm are reviewing the case and 'look forward to defending Mr Levoff with respect to those allegations.'
The SEC is asking a federal judge to order Levoff to pay a civil penalty worth three times the amount of the ill-gotten gains it claims he received. The agency also says he should be prohibited from serving as an officer or director of a public company.
Apple did not immediately respond to a request for comment.