Ex-Microsoft employee charged with insider trading
The U.S. Department of Justice and the Securities and Exchange Commission charged two Seattle men on Thursday with 35 counts of illegally trading on private Microsoft Corp information, which prosecutors said netted the pair more than $390,000 in illicit profits over an 18-month period.
Brian Jorgenson, a senior portfolio manager at Microsoft, passed information to a former colleague, online day trader Sean Stokke, who executed the trades, according to prosecutors.
The two men are due to appear in federal court in Seattle on Thursday.
According to the DoJ and the SEC, the scheme began in April 2012 when Jorgenson, who is 32, found out through his job in Microsoft’s treasury department that the software company was planning an investment in the digital business of bookseller Barnes & Noble Inc.
He passed that information to Stokke, now 28, who bought options betting that Barnes & Noble stock would rise. It jumped 49 percent when the investment was announced in late April, reaping Stokke profit of more than $184,000, prosecutors said.
The pair repeated the process twice more in the following 18 months, prosecutors said, by buying Microsoft and index options prior to earnings that Jorgenson knew would surprise Wall Street. Together, the two men took in another $208,000 or so in profit from the trades, according to the complaint filed by prosecutors.
“For every stock market winner, there is a loser, and trading on confidential inside information is a cheater’s way of gaining at the expense of others,” U.S. Attorney Jenny A. Durkan said in a statement.
Microsoft said it had already fired Jorgenson.
“Our company has zero tolerance for insider trading. We helped the government with its investigation and terminated the employee,” a Microsoft representative said in an emailed statement.