Apple's head of corporate law, Gene Levoff, has been indicted on charges of (PDF) insider trading.
According to statement from Department of Justice prosecutors, Levoff is alleged to have used his position as a senior Apple attorney to illegally trade shares ahead of Apple's quarterly results announcements over five years. He faces six charges of securities fraud and six counts of wire fraud.
Levoff also had a seat on Apple's Disclosure Committee, which meant he had access to non-public information about the company's trading results.
At the time, his main job was deciding which Apple insiders could and could not trade shares in the run up to earnings announcements – the so-called "blackout list". This informs any staff who may not trade Apple stock during the period – typically about a month before the earnings are announced up until 24 hours after the news has been released.
The DoJ accuses Levoff of running an insider trading scheme between February 2011 and April 2016.
The statement warns: "The securities fraud counts carry a maximum penalty of 20 years in prison and a $5 million fine. The wire fraud counts carry a maximum penalty of 20 years and a fine of the greater of $250,000 or twice the gain derived from or loss caused by the offense."
The statement also notes that these are just accusations and that Levoff should be considered innocent until proven guilty.
The Securities Exchange Commission (SEC) has already filed a civil suit against Levoff to reclaim his alleged ill-gotten gains. The SEC filing (PDF) details exactly which transactions it is concerned about. It is claimed that Levoff sold almost all his Apple stock, some $10m worth, in late July 2015, just before Apple announced it had missed targets for iPhone sales which pushed its shares down 4 per cent – saving Levoff $345,000 in losses.
Later in 2015, the day before the quarterly earnings were announced, it is alleged that Levoff bought 10,000 shares at $115.70 per share. Apple beat both sales and profits expectations and its shares rose by about 4 per cent.
In April 2016, shortly after receiving an email attachment with a draft of Apple's quarterly results, Levoff allegedly sold off shares again, avoiding a $32,000 loss.
Levoff, 45, of San Carlos, California, was a director of corporate law at Apple from 2008 until 2013, when he was made a senior director. He held that job until his sacking in September 2018. ®