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Apple’s Top Anti-Insider Trading Lawyer Charged With Insider Trading – Why Did He Bother?

The question here isn’t what did he do – that’s for the courts to decide – but why the hell did he bother to do what is charged he did? For the gains that are alleged were so minimal compared to what he got anyway as a result of his position that it’s ludicrous.

I refer to the idea that Apple’s top lawyer against insider trading himself indulged in insider trading. For that’s what’s is indeed being alleged:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] US prosecutors have charged a former top Apple lawyer with insider trading. Gene Levoff is accused of using confidential information to trade the firm’s securities for personal gain. Mr Levoff, who was responsible for ensuring compliance with Apple’s insider trading policies, is accused of breaching those policies on several occasions. [/perfectpullquote]

So, yes, the anti-insider trading lawyer is being had up for insider trading. But the thing is, the amount just wasn’t worth it:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Lawyer accused of avoiding $377,000 in losses by selling ahead of bad news.[/perfectpullquote]

Well, yes, $377,000 is real money. You or I would be happy to make that, to avoid that in losses. But, but:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]For instance, in July 2015, Levoff learned that Apple wouldn’t meet analysts’ third-quarter forecast for iPhone sales, the SEC said in a related civil complaint. That month, he sold about $10 million of Apple stock — virtually all of his holdings. When the company reported earnings, its shares plunged more than 4 percent. Levoff avoided losing about $345,000, the SEC said.[/perfectpullquote]

He was paid that $10 million by Apple. That’s his stock awards over the years he worked there. That’s on top of his salary of course.

And really, avoiding a $400k loss when you’re on a multiple of that a year anyway? And getting caught means you’ll lose the higher amount, not the stock losses?

This is actually one of the reasons why these sorts of people are paid high wages in the first place. To make screwing the pooch more expensive that is. Why fiddle for a few hundred thousand dollars if you’re being paid millions in the first place? The problem being that efficiency wages only tend to deter, not do so in every case.

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5 years ago

He was providing early information into the market. Insider trading is a ‘crime’ of no consequence. The laws should be changed.

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