Former Senior Apple Lawyer Charged with Insider Trading

These cases highlight two distinct views of insider trading. They clearly diverge in defining the necessary link between insiders and outsiders in order to hold an insider liable for a breach of fiduciary duties.  First, in the case of Goodwin v. Agassiz, 283 Mass. 358, 186 N.E. 659, 1933 Mass. LEXIS 1031 (Mass. 1933), the courts focus on whether there is a direct relationship between the defendant and the plaintiff. The court held that because the exchange of shares took place on the open market, the defendant did not owe the plaintiff any fiduciary duty, disregarding his use of inside information that was unavailable to the public.

In contrast, the case of Securities & Exchange Com. v. Texas Gulf Sulphur Co., 258 F. Supp. 262, 1966 U.S. Dist. LEXIS 8334, Fed. Sec. L. Rep. (CCH) P91,805 (S.D.N.Y. Aug. 19, 1966) fortifies the fiduciary duties of the those with the advantage of information over those without, regardless of their direct relationship

I must side with the SEC when determining how to evaluate the actions of an individual’s use of insider information and their relationship with those impacted. Insider trading is another front in the battle of the haves v have-nots. Physical harm should not be viewed as a prerequisite for consideration of damages done. Insider trading is a type of systemic information bias and a tactic used by those with power to benefit over those without it. In the recent case of United States Securities and Exchange Commission v Gene Daniel Levoff. United States District Court of New Jersey. Case 2:19-Cv-05536. 13 Feb. 2019, by using his executive position at Apple, overseer of company-wide insider trading regulations, to gain inside information and make subsequent trades of Apple stock, Gene Levoff escaped major losses by selling his shares in the company (Wakabayashi, 2019). Though there may have been no physical harm done to shareholders on the receiving end of these transfers, who now own his devalued shares of Apple, the portfolio of those investors depreciated in value more than they would have had he been held to the same standard as other investors. Upon the release of the negative performance reports, as an investor in Apple stock, I personally lost real dollars because Levoff was allowed to shed his stake in the game. I have no direct relationship with this man, but it is clear that I, as well as many other investors, suffered real harm due to Levoff’s breach of fiduciary duties. Though Apple was found to be blissfully unaware of Levoff’s activity, it has also suffered real damages to its reputation as investors must now reevaluate whether the company can be trusted to obey its duty of loyalty to its shareholders