Reading through the SEC complaint while he was a very senior executive, he was a very amateur trader.
The risk-analysis in hindsight aka - why risk jail / fines / everything to avoid a $350k loss on $10m+ of shares - is stupid.
But I'd say he clearly overestimated the risk / reward in a very amateur / fear based way.
For instance in one session, he bought ~$1.1m of stock expecting a large pop, and then sold a few days later for a net profit of only $4,500!
That should cover about an hour of his current legal bills.
Lots more detail in the actual complaint:
- Oversaw their entire corporate law division of 30 - 50 - "Levoff was responsible for Apple’s compliance with securities laws, including providing legal advice in connection with Apple’s SEC filings and financial reporting . . . "
- Apple had a long standing "blackout" policy where insiders were cautioned NOT to trade at all that he clearly ignored / broke multiple times. Including after he sent the blackout notice updated with "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.”
It's another when the next guy up on the corporate ladder got a $5m bonus to your $500k one.
If you work for a FINRA-registered firm they'll send a letter to your employer asking if they'd like your transaction information to be added to the data feed. I'm guessing they can facilitate the same for publicly traded companies and their employees but I've only ever worked on the financial firm side of things so I don't know for sure.
I have seen the FINRA question when opening accounts now that you mention it.
That brokage being TD Ameritrade.
Anyone here work at Apple? What brokerage does the company use to deposit your RSUs?
Saving over $300k is sizable, but selling $10M in stock seems pretty risky. Wouldn't this be a huge red flag, especially for someone who works at the company? Seems to be lots of risk and not that much (comparatively) saved.
Or perhaps this was his strategy in flying under the radar, since it didn't net him that much on a percentage basis?
But most importantly, if you have ten million dollars in AAPL (and a job that pays you more besides) why on earth are you taking risks like this?
He couldn't have known the size of the loss in advance. He probably expected the loss to be larger.
I dunno if his lawyer is just very optimistic but “We look forward to defending him with respect to these allegations,” is lawyer speak for "I have a mountain of evidence that is going to make these people look like fools."
IMO whether he's insider trading or just barely not it's a stupid risk to take either way.
Obviously this (and every other comment around here) are just speculation at this point since we have no good details.
To me (a former lawyer), that vague statement is definitely not an indication that he has a strong case. He may have one, but that statement comes across as weak to me. It's what you say when you can't offer any specifics about why the allegations are untrue. (As the old lawyer saying goes: "When the facts are on your side, pound the facts. When the law is on your side, pound the law. And when neither is on your side, pound the table.")
I have no insight into how the SEC catches these offenders, but I would assume they just: (1) collect all trades in a company X weeks before major announcement, (2) filter for outsized trades or specific derivatives, (3) take narrowed down list and see if any of those people have a relationship with the company.
Selling $10M of company stock immediately prior to an earnings announcement must certainly get flagged by the SEC for another look.
The civil SEC case normally comes first because the SEC investigation can have two outcomes, that often come together: civil charges by the SEC and a criminal referral to the Justice Department which then triggers a criminal investigation. But the referral itself is not generally public, and Justice doesn't usually talk a lot about investigations until/unless they file charges.
My mother had to cover insider trading when she was teaching. She said a lot of her students 'didn't get it'. My mother also worked for the IRS, tip don't piss off the enforcement people.
Since he wasn't an "executive officer" he wasn't required to file a Form 4 with the SEC.