The Securities and Exchange Commission on Wednesday charged a former Apple executive with insider trading.
Gene Levoff, senior director of corporate law and corporate secretary until September, "traded on material nonpublic information about Apple's earnings three times during 2015 and 2016," according to the lawsuit filed Wednesday in the U.S. District Court of New Jersey.
"Levoff also had a previous history of insider trading, having traded on Apple's material nonpublic information at least three additional times in 2011 and 2012. For the trading in 2015 and 2016, Levoff profited and avoided losses of approximately $382,000," the complaint says.
Levoff's position at Apple granted him insider access to not-yet-public earnings results and briefings on iPhone sales, the complaint says. On more than one occasion, he disobeyed the company's "blackout" period for stock transactions, selling or buying stock worth tens of millions of dollars, according to the SEC.
The agency alleges he bought shares and profited when the stock popped after positive earnings reports, and sold to avoid downturns that followed poor results.
Later on Wednesday, the U.S. Department of Justice announced it was charging Levoff with one count of securities fraud. He's set to appear in court on Feb. 20.
In a statement to CNBC, Levoff's attorney Kevin Marino said, "We are reviewing the civil and criminal allegations against Mr. Levoff and look forward to defending him in both matters."
Levoff was put on leave from Apple in July 2018 and terminated in September, the SEC lawsuit says.
"After being contacted by authorities last summer we conducted a thorough investigation with the help of outside legal experts, which resulted in termination," Apple said in a statement Wednesday.
Before his termination, Levoff was "responsible for Apple's compliance with securities laws," the SEC complaint says.
The complaint says:
In fact, Levoff shared responsibility for ensuring that employees complied with Apple's insider trading policies. On at least three occasions in 2010 and 2011, Levoff sent emails to company employees notifying them that a blackout period was about to commence and that they were prohibited from trading Apple securities for the duration of the period. In fact, Levoff sent two such emails immediately prior to his insider trading in 2011.
For example, on February 24, 2011, Levoff sent an email to Apple employees explaining that a blackout period would begin on March 1, 2011, and remain in effect "until 60 hours after earnings are released in April 2011."
The first sentence of Levoff's February 24, 2011 email stated: "REMEMBER, TRADING IS NOT PERMITTED, WHETHER OR NOT IN AN OPEN TRADING WINDOW, IF YOU POSSESS OR HAVE ACCESS TO MATERIAL INFORMATION THAT HAS NOT BEEN DISCLOSED PUBLICLY."
You can read the full SEC complaint here: