An in-house lawyer who was once responsible for enforcing the Apple Inc insider trading policy has admitted to using privileged financial information for illegal personal gain. The lawyer, a former director of corporate law across the company’s global operations, has pleaded guilty in a United States federal court to six counts of securities fraud between 2011 and 2016.
According to the complaint, the lawyer betrayed the trust of one of the world’s largest tech companies for his own financial benefit. By misappropriating draft regulatory filings for his own use and transacting Apple stock held in personal brokerage accounts, he was able to make over $227,000 in profits and avoid $377,000 of losses; a total gain of $604,000.
As the former co-chairman of Apple’s disclosure committee, the lawyer was permitted to review the company’s revenue and earnings statements before they were filed with the Securities and Exchange Commission (SEC). On several occasions, it is alleged that he traded within designated blackout periods, even after telling other employees this activity was prohibited.
In defence, the lawyer claimed the charges were unconstitutional, and that no statute specifically bared insider trading. This argument was dubbed a ”Hail Mary” by prosecutors and promptly quashed by the court. Sentencing is due to take place later this year, with each charge carrying a maximum penalty of 20 years in prison and a fine of between $250,000 and $5 million.
The Stanford Law School graduate joined Apple in 2008 and enjoyed a decade-long career with the company, rising to become a senior legal executive reporting directly to the general counsel. Despite this relative success, he was unable to resist the temptation of trading on inside knowledge to illegally advance his Apple shareholding valued at approximately $10 million.