Apple’s former securities lawyer pleads guilty for doing the insider trading he was supposed to prevent

Illustration by Alex Castro / The Verge

According to a DOJ press release, a former Apple lawyer has pleaded guilty to six counts of securities fraud. The release says that Gene Levoff, once the company's former corporate secretary and director of corporate law, "misappropriated material, nonpublic information about Apple's financial results and then executed trades involving the company's stock." The charges against him were first filed by the SEC.

Levoff was a member of Apple's Disclosure Committee that looked over company earnings reports before they were published. According to the DOJ, he was able to realize profits of $227,000 on certain trades and avoided losses of $377,000 on others. Levoff ignored the company's quarterly "blackout periods" even after being told they couldn't buy or sell Apple stock during that time.

Specifically, Levoff was co-chairman of Apple’s Disclosure Committee, which reviewed and discussed the company’s draft quarterly and yearly earnings materials and periodic U.S. Securities and Exchange Commission (SEC) filings before they were publicly disclosed. Levoff mined these materials for inside information about Apple to guide his decisions to buy and sell Apple stock ahead of its earnings announcements. When Apple posted strong revenue and net profit for a given financial quarter, he purchased large quantities of stock, which he later sold for a profit once the market reacted to the news. When there were lower-than-anticipated revenue and net profit, Levoff sold large quantities of Apple stock, avoiding significant losses.

Levoff will be sentenced on November 10. A request for comment was not immediately responded to by Apple.