Badm644 Insider Trading

Justin Bates

Essay #2: Insider Trading

6/7/2019

BADM 644

Assignment Description:

Find a recent story (within the last eighteen months) that discusses someone accused of insider trading.  DUE FRIDAY 5/7

Paper must:

• Explain what underlying facts are the basis for the state’s case.
• Describe what the specific legal violations are (if needed go to the SEC or DOJ’s website or press release on the matter).
• Analyze whether the facts (as you know them) are strong enough to support the charges against the accused.
• Explain your position.

        Gene Levoff: Former Apple Senior Attorney Charged by SEC for Insider trading.

        He was responsible for the company’s insider trading policies.

        Was insider trading from 20011 to 2015

He has since been fired and I awaiting trial.

My thesis: The facts in the case are strong enough to support the charges against him

I brief summary of his crimes was that he was making trades using inside info during apples “blackout periods” which are periods of time (periods revolving around the release of performance reports) where Apple forbids executives from making trades. This guy was obtaining the reports before the market and either buying or selling apple stock depending on the performance of the company. He made over 300k doing this. See doc below.

See details on the case here: (these links are also below under “More about the case”

        https://www.nytimes.com/2019/02/13/technology/apple-insider-trading.html

           https://www.wsj.com/articles/sec-accuses-ex-apple-executive-of-insider-trading-   11550081111

https://www.marketwatch.com/story/what-exactly-is-insider-tradingand-how-do-you-avoid-it-2018-08-13

My outline

1. Introduce defendant

Summarize the case against him (facts and what the SEC charges he did)

Penalty he is facing

My thesis: The facts in the case are strong enough to support the charges against him.

1. What is insider trading according to the SEC

1. https://www.moneycrashers.com/what-is-insider-trading-definition-laws-cases/

• What is insider trading -   https://www.investor.gov/additional-resources/general-resources/glossary/insider-trading
• https://www.sec.gov/fast-answers/answersinsiderhtm.html

SEC case against defendant and Specific charges against the client in more detail       (referencing the charging documents)

1. https://www.sec.gov/litigation/litreleases/2019/lr24399.htm
2. “on two occasions, Levoff’s misconduct violated the duty of trust and confidence he owed Apple and its shareholders”
3. Charging document - https://www.sec.gov/litigation/complaints/2019/comp24399.pdf

1. Why I believe the facts are strong against Gene

1. Really just hit home the facts. There is no dispute that he was brazenly violating the rules that he was supposed to enforce.
2. More details about the case and what he did.

1. https://www.marketwatch.com/story/what-exactly-is-insider-tradingand-how-do-you-avoid-it-2018-08-13
2. https://www.wsj.com/articles/sec-accuses-ex-apple-executive-of-insider-trading-11550081111

1. How he broke specific insider trading laws and why the case is strong

1. Conclusion

1. Reference the current state of rampant insider trading in corporate America and how the SEC is cracking down maybe what motivated him and how (tying into my thesis) he has no defense and will end up doing his time(whatever it is don’t remember)

2. Harvard Business Review. Jun2012, Vol. 90 Issue 6, p26-26. 1/3p. “INSIDER TRADING: IT'S NOT ABOUT THE CASH”

1. “It's puzzling when wealthy executives are arrested for insider trading; after all, they don't need the money. And in fact, according to new research by Utpal Bhattacharya, of Indiana University, and Cassandra D. Marshall, of the University of Richmond, the higher the salary, the greater the likelihood of being indicted for this offense. A study of 52 top managers charged with insider trading found that they were generally better paid than their peers. Executives who cross the line may be motivated mainly by factors such as hubris and the belief that others are engaging in the practice, the researchers say.”