(Bloomberg) -- The former senior Apple Inc. lawyer tasked with policing insider trading at the company avoided prison time for committing the crime himself.
Gene Levoff was sentenced Thursday to four years of probation by US District Judge William J. Martini in Newark, New Jersey. Levoff pleaded guilty in June 2022 to using his access to Apple’s draft Securities and Exchange Commission filings to make illegal trades.
Levoff, 49, had faced as long as two years in prison under his plea agreement, and prosecutors had urged the judge to impose jail time to deter similar crimes. “If people who are insiders at massive companies like Apple don’t get prison for insider trading, then who does?” federal prosecutor Joshua Haber said.
But Martini said he didn’t think it was necessary to send Levoff to prison to deter others, noting that the 2001 Stanford Law School graduate already lost his job and will never practice law again.
“We are extremely grateful that Judge Martini appreciated the unique nature of this individual and this offense in imposing a sentence of probation,” Levoff’s lawyer, Kevin Marino, said. He had argued for no jail time, citing Levoff’s mental health issues, including depression.
Levoff joined Apple in 2008 and eventually became director of corporate law. In that role, he was responsible for enforcing the company’s rules against insider trading and routinely reminded other employees that they were barred from trading on confidential information.
He also co-chaired Apple’s disclosure committee, which reviewed its quarterly and annual earnings before they were publicly released. He used his advance knowledge to buy shares ahead of positive results or sell them before disappointing ones. Prosecutors said Levoff made around $227,000 in profits and avoided $377,000 in losses between 2011 and 2016.
Levoff agreed to forfeit around $604,000 as part of his plea deal.
Apple initially placed Levoff on leave in the summer of 2018 and fired him about two months later. He was charged by federal prosecutors and sued by the SEC the following year.
“I just want to say how very sorry I am, and how deeply ashamed I am,” Levoff said in court.
Levoff had initially fought the charges by arguing that insider trading was an unconstitutional “judge-made” crime not barred by any statute. Martini rejected Levoff’s “Hail Mary” motion to dismiss the indictment.
The case is US v. Levoff, 19-cr-00780, U.S. District Court, District of New Jersey (Newark).
(Updates with detail from hearing.)
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