Imagine a situation when somebody at the C-level is responsible and in-charge of ensuring ethical standards and setting policies on insider trading is himself accused and punished of that very same prohibited action.

Yes – this is what CFO.com titled the news “At Apple, the Fox was minding the Hen house”. Very strong words but very apt criticism of non-compliance in the top echelons of the company.

The tech giant’s former Global Head of Corporate Law, Gene Daniel Levoff, was charged by the Securities and Exchange Commission with trading Apple securities ahead of three quarterly earnings announcements in 2015 and 2016.

Before the public announcement of Apple’s earnings, Levoff sold off all his personal holdings worth about $10 million Apple stock from personal brokerage accounts. By doing so, he avoided personal losses of about $345,000. Apple’s share prices dropped by more than 4% when it publicly disclosed quarterly financial data.

“Levoff’s alleged exploitation of his access to Apple’s financial information was particularly egregious given his responsibility for implementing the company’s insider trading compliance policy,” said Antonia Chion, associate director of the SEC’s division of enforcement.

As a senior Director, Levoff reported to Apple’s general counsel, and reviewed and approved the company’s insider trading policy. Not only that, he was the one who notified employees regularly about blackout periods around earnings announcements.  He also managed the company’s corporate subsidiaries structure and was a Director in several Apple subsidiaries.

The SEC’s complaint, filed in federal district court in Newark, New Jersey, charges Levoff with fraud and is seeking the return of his trading profits plus interest and penalties. It is also seeking to bar Levoff from serving as an officer or director. In a parallel action, the U.S. attorney’s office for the district of New Jersey announced criminal charges against Levoff.

Levoff, of San Carlos, Calif., was let go by Apple in September 2018.

News: Courtesy Vincent Ryan, -Feb 13 2019 CFO.com/US

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