SEC


'SEC' Articles

Former Apple Lawyer Facing Criminal Charges for Insider Trading

Former Apple lawyer Gene Levoff, who was in charge of enforcing Apple's Insider Trading Policy, is facing criminal charges related to insider trading of Apple stock, reports CNBC. Levoff was today indicted for insider trading, and he is facing six counts of security fraud and six counts of wire fraud. According to the U.S. government, Levoff used inside information from Apple, including financial results before they were published, to sell Apple stock ahead of weaker than expected earnings results between 2011 and 2016 as well as to purchase stock during stronger quarters. This scheme to defraud Company-1 and its shareholders allowed Levoff to realize profits of approximately $227,000 on certain trades and to avoid losses of approximately $377,000 on others. When Levoff discovered that Company-1 had posted strong revenue and net profit for a given financial quarter, he purchased large quantities of stock, which he later sold for a profit once the market reacted to the news.The United States Securities and Exchange Commission first filed charges against Gene Levoff in February, but now he is facing criminal charges in addition to civil charges. Levoff worked for Apple from 2008 to 2018, and prior to when he was fired from the company, he was the senior director of corporate law. Apple declined to comment on the criminal charges filed today, but in February, said the following: "After being contacted by authorities last summer we conducted a thorough investigation with the help of outside legal experts, which resulted in

SEC Charges Former Apple Lawyer Gene Levoff With Insider Trading [Updated]

The U.S. Securities and Exchange Commission has charged Apple's former vice president of corporate law Gene Levoff with insider trading, according to a lawsuit filed in the U.S. District Court for New Jersey on Wednesday. The complaint alleges that Levoff had access to Apple's earnings results before they were publicly announced and used this information to buy Apple shares in advance of better-than-expected earnings results and to sell shares ahead of weaker-than-expected earnings results between 2011 and 2016. Through his illegal insider trading in 2015-2016, the complaint alleges that Levoff profited and avoided losses of approximately $382,000:For example, in July 2015 Levoff received material nonpublic financial data that showed Apple would miss analysts' third quarter estimates for iPhone unit sales. Between July 17 and the public release of Apple's quarterly earnings information on July 21, Levoff sold approximately $10 million dollars of Apple stock – virtually all of his Apple holdings – from his personal brokerage accounts. Apple's stock dropped more than four percent when it publicly disclosed its quarterly financial data.Levoff also served on Apple's Disclosure Committee from September 2008 to July 2018. In this position, he was ironically responsible for ensuring that other Apple employees were compliant with Apple's insider trading policies, including enforcement of "blackout periods" around the time of Apple's earnings reports. Levoff was also tasked with signing off on some Apple acquisitions in his role. He was terminated in September 2018,

Apple Now Has 132K Full-Time Employees, Spent $14.2B on R&D in 2018 Fiscal Year

Following the conclusion of its 2018 fiscal year, which ended September 29, Apple today filed its annual Form 10-K [PDF] with the SEC. We've combed through the exhaustive, legalese-rich 72-page report so you don't have to. Highlights:9,000 more employees: Apple has 132,000 full-time employees as of the end of its 2018 fiscal year, up from 123,000 a year prior. R&D expenses rose nearly $3 billion: Apple spent $14.2 billion on research and development in its 2018 fiscal year, a nearly 23 percent increase over the $11.5 billion it spent in its 2017 fiscal year. Apple continues to execute its share repurchase program: Apple had 23,712 shareholders of record as of October 26, 2018, down from 25,333 as of October 20, 2017. There were 4,754,986,000 outstanding shares of Apple stock as of the end of its 2018 fiscal year. Genius Bar expenses are down: Apple's expenses from warranty claims totaled $4.1 billion in its 2018 fiscal year, down from $4.3 billion in its 2017 fiscal year and $4.6 billion in its 2016 fiscal year. CapEx to drop: Apple anticipates utilizing approximately $14 billion for capital expenditures during its 2019 fiscal year, down from $16.7 billion in its 2018 fiscal year. The capital is used towards Apple's manufacturing equipment, data centers, corporate facilities, and retail stores. Apple snaps up more office space: Apple owned 16.5 million square feet and leased 24.3 million square feet of building space as of September 29, 2018. By comparison, Apple owned 13.4 million square feet and leased 23.0 million square feet of building space as of September

Apple Seeks to Block Shareholder Proposals on Environment and Human Rights Given Its Existing Focus on Those Issues

Apple is said to be "pushing back" on multiple shareholder proposals that deal with issues like Apple's greenhouse gas emissions, climate change, and human rights, discovered in letters the Cupertino company sent to the Securities and Exchange Commission in November (via Reuters). At least four proposals were argued as relating to "ordinary business," with Apple further stating that they are "not necessary" due to the company's day-to-day focus on those issues. Apple's letters state that this means the proposals can be left off of the proxy it is expected to publish in early 2018, ahead of its annual shareholders meeting where these proposals would be heard. Apple says these are areas it "routinely reviews" and therefore they do not represent "significant policy issues" that it classifies as requiring a shareholder vote. Still, some activists argue that the move by Apple "could sharply restrict investor rights," with the company using a newly enacted guidance put in place by the SEC on November 1 in its attempt to block the proposals. While companies routinely seek permission to skip shareholder proposals, Apple’s application of the new SEC guidance shows how it could be used to ignore many investor proposals by claiming boards routinely review those areas, said Sanford Lewis, a Massachusetts attorney representing Apple shareholders who had filed two of the resolutions. Were the SEC to side with Apple, “this would be an incredibly dangerous precedent that would essentially say a great many proposals could be omitted,” Lewis said. Apple's letter is reported as

Apple's Retail Chief Angela Ahrendts and Top Lawyer Bruce Sewell Each Sell Over $10 Million in Stock

Apple's retail chief Angela Ahrendts and top lawyer Bruce Sewell each sold over $10 million in company stock over the past week, according to a pair of disclosures with the Securities and Exchange Commission. Pursuant to her trading plan adopted in February, Ahrendts sold 75,000 shares of Apple stock between May 4 and May 8, netting nearly $11.1 million based on the weighted average sale price of the five transactions. Ahrendts still owns 103,116 shares in Apple following the sale, worth nearly $16 million. Sewell sold 67,500 shares of Apple stock in multiple transactions on May 5, netting just over $10 million based on the weighted average sale price. Sewell still owns 141,325 shares in Apple following the sale, worth nearly $22 million. Ahrendts has served as Apple's Senior Vice President of Retail since 2014, overseeing the company's physical and online storefronts. Under her leadership, Apple has been renovating several of its stores, partly in an effort to turn them into community gathering places rather than just sales floors. Sewell has served as Apple's General Counsel since 2009, overseeing all legal matters, including corporate governance, intellectual property, litigation and securities compliance, global security, and privacy. He came into the spotlight last year twice during separate battles with the FBI and Spotify.

Apple Raises $10 Billion in Debt Ahead of Trump's Plans for Tax Holiday

Apple has raised $10 billion in debt through a nine-part bond sale of both fixed and floating rate notes, according to the company's final pricing term sheet filed with the U.S. Securities and Exchange Commission on Friday. The nine-part sale includes: $500 million maturing in 2019 with a floating interest rate based on three month LIBOR plus 8 basis points $500 million maturing in 2020 with a floating interest rate based on three month LIBOR plus 20 basis points $1 billion maturing in 2022 with a floating interest rate based on three month LIBOR plus 50 basis points $500 million maturing in 2019 with a fixed 1.55% interest rate $1 billion maturing in 2020 with a fixed 1.9% interest rate $1.5 billion maturing in 2022 with a fixed 2.5% interest rate $1.75 billion maturing in 2024 with a fixed 3% interest rate $2.25 billion maturing in 2027 with a fixed 3.35% interest rate $1 billion maturing in 2047 with a fixed 4.25% interest rate Apple held $246.1 billion in cash and marketable securities last quarter, but around 94% of that money is held overseas and would be subject to high U.S. taxes upon repatriation—something U.S. President Donald Trump plans to change. In the meantime, by raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, particularly given its low-risk Aa1/AA+ bond credit rating. Apple typically uses the capital raised to fund dividend payments to shareholders and its share buyback program. Last quarter, Apple returned almost $15 billion to investors through dividends and buybacks. $201 billion of Apple's $250

Tim Cook Cashes in $3.6 Million in Stock as Respected Analyst Gives Him Passing Grades

Apple CEO Tim Cook sold 30,000 shares of Apple stock this week, valued at $3.6 million based on the company's stock price of $120 at the time of the transactions, according to a U.S. Securities and Exchanges Commission disclosure. The shares were sold as scheduled pursuant to Cook's predetermined trading plan. Cook retains 1,009,809 company shares worth over $121 million based on Apple's current stock price following the sale. A recent SEC filing revealed Cook was paid $8.7 million in 2016, which is $1.5 million less than he was paid in 2015. The decrease stems from Apple failing to meet its own target performance goals for both net sales and operating income in 2016, resulting in senior executives receiving only 89.5% of their cash incentives. However, upon reaching his fifth anniversary as Apple CEO last year, Cook cashed in nearly $137 million in previously-awarded stock bonuses tied to both his tenure and Apple's performance under his leadership. Accordingly, after bonuses, Cook actually earned roughly $145 million last year, his biggest payout yet. Yesterday, Apple analyst Neil Cybart opined that Cook and his inner circle are "doing what needs to be done in order to maintain Apple's relevancy," but he noted "there is room for improvement." He called out sporadic Mac and iPad updates, and slow progress with Siri, as two blemishes among others in its product strategy.In attempt to add a bit of relative context to this subjective grading: • Product Strategy: A- • Product Pipeline/R&D: A • Operations: B- • Marketing/Storytelling: C+ •

Tim Cook's Pay Was $1.5 Million Less in 2016 as Apple Missed its Own Performance Targets

Apple's annual shareholders meeting will be held on February 28 at 9:00 a.m. Pacific Time in the Town Hall building at its Infinite Loop headquarters in Cupertino, California, according to an SEC document filed electronically today. Admission is open to all shareholders of record on a first come, first served basis. A primary item of business on the agenda is to elect the Board of Directors to serve until the next annual meeting of shareholders in 2018, with Apple nominating the same eight individuals currently serving on its board: Tim Cook, Al Gore, Bob Iger, James Bell, Andrea Jung, Art Levinson, Ron Sugar, and Sue Wagner. The filing reveals Apple CEO Tim Cook made $8.7 million in 2016, down from $10.28 million in 2015 and $9.2 million in 2014. Cook's earnings included a base salary of $3 million, non-equity incentives of $5.37 million, and other compensation of nearly $378,000. Other named executives netted nearly $23 million apiece. Apple Executive Compensation in 2016 • Apple CEO Tim Cook: $8,747,719 • Apple CFO Luca Maestri: $22,803,569 • Apple retail chief Angela Ahrendts: $22,902,892 • Apple services chief Eddy Cue: $22,807,544 • Apple hardware engineering chief Dan Riccio: $22,807,544 • Apple general counsel Bruce Sewell: $22,807,544The filing did not disclose compensation for other key Apple executives such as design chief Jony Ive, operating chief Jeff Williams, software engineering chief Craig Federighi, and marketing chief Phil Schiller. Apple noted it did not meet its target performance goals for both net sales and operating income in 2016,

Apple's Chairman and Top Lawyer Cash in Combined $10M in Stock Bonuses

Apple chairman Arthur D. Levinson and general counsel Bruce Sewell recently sold approximately $7.6 million and $2.5 million worth of company shares respectively, according to SEC documents filed electronically this week. Levinson sold 70,000 shares of common stock on August 9 for an average price of $108.68, while Sewell disposed of 23,305 shares for an average price of $107.49 on August 5. The combined return was slightly over $10 million. Levinson, CEO of biotech company Calico, a subsidiary of Google parent Alphabet, has served as chairman of Apple's board of directors since November 2011. The former Genentech executive has served on the board since 2000, with CEO Tim Cook praising his "enormous contributions to Apple" and "incredibly valuable" insight and leadership. Sewell has served as Apple's general counsel, or chief lawyer in layman's terms, since September 2009. He oversees all company-related legal matters, including corporate governance, intellectual property, litigation and securities compliance, global security, and privacy, including a recent high-profile court battle with the FBI related to the intersection of national security and smartphone encryption. Apple's senior executives and directors are commonly awarded generous stock bonuses based on performance and tenure. Last August, Cook and services chief Eddy Cue received 560,000 and 350,000 restricted stock units respectively, worth a combined $93.8 million at the time. Later in the year, Apple's recently promoted hardware chief Johny Srouji was awarded nearly $10 million in restricted stock

Apple Finalizes $7 Billion Five-Part Bond Sale

Apple has raised $7 billion in debt through a five-part bond sale of both fixed and floating rate notes, according to the company's final pricing term sheet filed with the U.S. Securities and Exchange Commission on Friday. The five-part sale includes: $350 million maturing in 2019 with a floating interest rate based on three month LIBOR plus 14 basis points $1.15 billion maturing in 2019 with a fixed 1.1% interest rate $1.25 billion maturing in 2021 with a fixed 1.55% interest rate $2.25 billion maturing in 2026 with a fixed 2.45% interest rate $2 billion maturing in 2046 with a fixed 3.85% interest rate The transaction was underwritten by Goldman Sachs, J.P. Morgan Securities, MLPF&S, and Deutsche Bank Securities, among others. Apple held $231.5 billion in cash and marketable securities, partially offset by $68.9 billion in long-term debt, as of the fiscal third quarter, but a significant portion of that money is held overseas and would be subject to high U.S. taxes upon repatriation. By raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, particularly given its low-risk Aa1/AA+ bond credit rating. Apple typically uses the capital raised to fund dividend payments to shareholders and its share buyback program, which the company expanded to $175 billion in April. At the time, Apple said it expects to spend over $250 billion in cash under its capital return program by the end of March 2018. It also uses the capital for general corporate purposes, such as the repayment of earlier debt and

Apple to Raise Up to $12 Billion in Debt to Fund Capital Return Program

Apple has filed a preliminary prospectus supplement with the U.S. Securities and Exchange Commission as it prepares to issue a $10-$12 billion bond sale, reports CNBC. The debt raised will fund Apple's capital return program, including continued stock buybacks and dividend payments to shareholders, and general corporate purposes such as the repayment of debt and acquisitions. Apple will be offering floating rates that mature in 2018 and 2019, in addition to fixed rates that mature between 2018 and 2046. Apple's proposed 30-year bond due in 2046 may yield 2.15 percentage points more than similar-maturity Treasuries, according to Bloomberg. Apple is also planning to issue seven-year green bonds, typically used for clean energy and other sustainable initiatives, the report claims. Apple's capital return program currently runs through March 2017, as announced last year. The company has returned $153 billion in capital to investors of its $200 billion currently authorized, so the iPhone maker will almost certainly need to raise debt through this bond sale in order to continue stock buybacks and dividend payments before setting a new authorized amount as soon as April. Apple held $215.7 billion in cash and marketable securities, partially offset by $53.2 billion in long-term debt, as of the first fiscal quarter of 2016, but a significant portion of that money is held overseas and would be subject to high U.S. taxes upon repatriation. By raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, especially given its Aa1/AA+ bond credit

Apple's New Hardware Chief Johny Srouji Awarded Nearly $10 Million in Stock

Apple's newly promoted Senior Vice President of Hardware Technologies Johny Srouji was awarded 90,270 restricted stock units on October 5, 2015, according to a recent filing with the U.S. Securities and Exchange Commission. The RSUs awarded vest 12.5% in semi-annual installments over a four year period ending October 2019. Srouji now has a total of 217,305 RSUs and 101,881 common stock units, which together amount to just over $34 million at AAPL's current trading price of around $107 per share. The latest batch of 90,270 RSUs are currently valued at approximately $9.6 million. Apple often rewards high-level executives with RSUs based on their performance. In August, for example, Apple CEO Tim Cook and Senior Vice President of Internet Software and Services Eddy Cue received 560,000 and 350,000 RSUs respectively worth over $97 million combined. Apple retail chief Angela Ahrendts also received 113,334 RSUs as a signing bonus upon joining Apple in May 2014. Srouji was promoted to Senior Vice President of Hardware Technologies on December 17, as part of a larger executive team makeover that saw Jeff Williams promoted to COO and marketing chief Phil Schiller take over App Store leadership across all Apple platforms. Tor Myhren, chief creative officer at ad agency Grey, will also join Apple in early 2016 as Vice President of Marketing Communications. Srouji joined Apple in 2008 to lead development of the A4 chip for iPhone 4, and he now oversees silicon and hardware technologies, including batteries, application processors, storage controllers, sensors silicon,

Tim Cook and Eddy Cue Receive Combined $94 Million in Apple Stock

Apple CEO Tim Cook and Senior Vice President Eddy Cue received 560,000 and 350,000 restricted stock units respectively this week, worth a combined $93.8 million based on AAPL's closing price of $103.12 on Monday, according to a pair of filings with the U.S. Securities and Exchange Commission. Tim Cook and Eddy Cue at an Apple Store in 2014 (Image: Bloomberg) Cook was awarded with 280,000 performance-based restricted stock units in full based on Apple's performance relative to the other companies in the S&P 500 over a two-year period ending August 24. Apple needed to achieve a total shareholder return (TSR) of at least 41.36% to place in the top third of companies in the index, and Apple's TSR for the two-year period was 76.76%. Cook and Cue did not sell any of their RSUs, although 290,836 and 171,853 shares were withheld by Apple respectively to satisfy the minimum statutory tax withholding requirements on vesting of RSUs. Cue transferred his remaining 178,147 shares that vested to a family trust, and he has now been awarded all 700,000 shares granted to him on September 2, 2011. Cook has a remaining 4.76 million RSUs scheduled to vest as follows per the SEC filing: 700,000 RSUs on August 24, 2016; 700,000 RSUs on August 24, 2021; 1,680,000 vest in six equal annual installments commencing August 24, 2016; the remaining 1,680,000 are all subject to performance based vesting requirements and will potentially vest in six annual installments commencing August 24, 2016.Cook must remain employed at Apple to receive his unvested RSUs on their applicable vesting dates.

Apple Prices Bond Sale in Japan at ¥250 Billion

Apple has set a principal amount of ¥250 billion ($2.01 billion) for its bond sale in Japan per a final pricing term sheet published by the U.S. Securities and Exchange Commission on Thursday. The yen-denominated bonds have an interest rate of 0.350% and are set to mature on June 10, 2020. Interest is to be paid semi-annually on June 10 and December 10, commencing December 10, 2015. The global notes will be available for purchase by both domestic and foreign investors, with net proceeds to be used for general corporate purposes, including stock buybacks, dividend payments, funding for working capital, capital expenditures, acquisitions and debt repayment. The issue is being handled by Goldman Sachs International and Mitsubishi UFJ Securities