Former Apple In-House Attorney Files Motion to Dismiss Insider Trading Charges
"He [Levoff] challenges the United States Attorney to identify the federal criminal law—a law passed by Congress—that he violated when he allegedly traded Apple stock based on information he gleaned as an in-house Apple lawyer and senior executive," Kevin Marino, founding partner at Marino, Tortorella & Boyle in Chatham, New Jersey, wrote in the motion to dismiss.
April 28, 2020 at 04:37 PM
3 minute read
Apple logo. Photo: Songquan Deng/Shutterstock.com
A former in-house lawyer at Apple Inc. accused of insider trading filed a motion to dismiss Monday, arguing that insider trading has been validated through case law rather than a statute that makes prosecuting it unconstitutional.
In February 2019, Gene Levoff was charged with securities fraud and wire fraud in the U.S. District Court for the District of New Jersey. Specifically, the U.S. Justice Department claims that Levoff sold stock he owned in the company during blackout periods. Prosecutors also claim Levoff "misappropriated material, nonpublic information about Company-1's [Apple Inc.] financial results and then executed trades involving the company's stock."
The alleged scheme, according to prosecutors, allowed Levoff to make $27,000 on some trades and avoid losses of approximately $377,000 on others.
In a motion to dismiss the charges, Levoff's attorney, Kevin Marino, founding partner at Marino, Tortorella & Boyle, in Chatham, New Jersey, asked the court to dismiss the claims because insider trading has never been made into law by Congress.
"He [Levoff] challenges the United States Attorney to identify the federal criminal law—a law passed by Congress—that he violated when he allegedly traded Apple stock based on information he gleaned as an in-house Apple lawyer and senior executive," Marino wrote in the motion to dismiss.
In the motion, Marino said the definition of insider trading is "judge-made."
"Every element of the crime and the scope of regulated individuals subject to it was divined by judges, not elected legislators. This alone renders the criminal prosecution of insider trading unconstitutional," Marino said.
In the motion, Marino claims insider trading fails the "constitutional test for acceptable civil common law."
"Insider trading law does not fit within the narrow categories of common law 'necessary to protect federal interests,' which courts have traditionally limited to rights and obligations of the United States, international disputes, admiralty cases, and otherwise unique circumstances unrelated to insider trading," Marino wrote in the brief.
Marino declined to comment on the case outside of what is in the motion to dismiss.
Courtney Howard, Daniel Shapiro and Heather Suchorsky are the prosecutors in the case. The U.S. Department Attorney's Office for the District of New Jersey did not have a comment on the motion.
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