Former Microsoft senior portfolio manager Brian Jorgenson has been charged with insider trading by the U.S. Securities and Exchange Commission (SEC).
The SEC said in a statement published Thursday that Jorgenson obtained confidential information ahead of company announcements and used the knowledge to exploit the stock market.
Jorgenson and his friend, Sean Stokke — who allegedly traded in advance of Microsoft’s fourth quarter earnings this July, and benefited from Microsoft’s then-intentions to invest $300 million in Barnes & Noble’s e-reader business — were additionally charged by the Justice Dept., according to a Reuters brief.
The SEC alleges after Stokke traded on the insider deal information that Jorgenson provided from his position at the software giant, the two split the profits in their shared brokerage accounts.
They made joint trading decisions with the goal of generating enough profits with the intention of forming their own hedge fund.
The two made a combined $393,000 in profits from when they started in April 2012, the statement added.
What’s Hot on ZDNet
Jorgenson’s position at Microsoft’s Treasury Group allowed him access financial information, which could be used to benefiting ahead of good or bad news reports.
The complaint alleges Jorgenson also prepared a written analysis of how the market would react to the negative news that Microsoft’s fourth quarter earnings were almost 12 percent below Wall Street estimates. Estimating that Microsoft’s stock price would drop by at least six percent, the stock dropped further to 11 percent. Jorgenson and Stokke generated more than $195,000 in profits as a result.
According to a Seattle Times article published Wednesday, Jorgenson said “greed” drove his decision to engage in the scheme.
A Microsoft spokesperson said in an emailed statement to ZDNet: “Our company has zero tolerance for insider trading. We helped the government with its investigation and terminated the employee.”
- Independent bookseller suit against Amazon tossed, while Barnes & Noble faces SEC investigation (teleread.com)
- Daren Jorgenson Steals From Other Doctors (darenjorgenson.wordpress.com)
- SEC probing Barnes & Noble accounting (teleread.com)
- Were Nook’s Books Cooked? Barnes & Noble’s Accounting Investigated By SEC (forbes.com)