Microsoft Senior Manager Brian Jorgenson has been charged with insider trading by the U.S. Securities and Exchange Commission (SEC).
Microsoft employee Brian D. Jorgenson obtained confidential information and tipped Sean T. Stokke in advance of the company’s announcements.The pair equally split the profits in their shared brokerage accounts after Mr. Stokke traded on the information Mr. Jorgenson provided. The agency added that the two were trying to generate enough profits to create their own hedge fund.
According to the SEC’s complaint filed in U.S. District Court for the Western District of Washington, Jorgenson and Stokke made a combined $393,125 in illicit profits in their scheme, which began in April 2012.
Microsoft planned to invest $300 million into Barnes & Noble’s Nook reader project.Jorgenson passed that information to Stokke, now 28, who bought options betting that Barnes & Noble stock would rise. It jumped about 50 percent when the investment was announced in late April, reaping Stokke profit of more than $184,000, prosecutors said.
“Abusing access to Microsoft’s confidential information and generating unlawful trading profits is not a wise or legal business model for starting a hedge fund,” said Daniel M. Hawke, chief of the SEC Enforcement Division’s Market Abuse Unit and director of the SEC’s Philadelphia Regional Office. “We thwarted the misguided plans of Jorgenson and Stokke as they sought to illegally profit at others’ expense.”
A Microsoft spokeswoman, meanwhile, said the company has “zero tolerance for insider trading” and it “helped the government with its investigation and terminated the employee.”
Jorgenson and Stokke are charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, both directly and pursuant to 20(d) of the Exchange Act.
