Microsoft executive charged with insider trading

December 19, 2013
A window of the "Microsoft Berlin" venue on November 5, 2013 in Berlin

US authorities Thursday charged a Microsoft executive and his friend and business partner with insider trading, saying they used confidential information on the tech giant's investment in bookseller Barnes & Noble.

Criminal and civil charges were filed against Microsoft portfolio manager Brian Jorgenson, and his friend Sean Stokke, officials said.

According to a Securities and Exchange Commission complaint, Jorgenson and Stokke made a combined $393,125 in illicit profits in their scheme which began in April 2012.

Officials said Jorgenson tipped off Stokke ahead of a public announcement that Microsoft intended to invest $300 million in Barnes & Noble's e-reader business.

Jorgenson had this information because of his job at Microsoft. After the public announcement on April 30, 2012, Barnes & Noble's stock price jumped 51 percent that day, giving the pair gains of $185,000.

In a second instance, the two men colluded to buy options in Microsoft ahead of the company's earnings announcement in July 2013, an SEC statement said.

As part of his duties at Microsoft, Jorgenson prepared a written analysis of how the market would react to the negative news that Microsoft's earnings were more than 11 percent below consensus estimates, said authorities.

He estimated that Microsoft's stock price would decline by at least six percent and gave this to Stokke, who purchased options which allow a trader to make a profit from a drop in share value. This provided more than $195,000 in illicit profits, the SEC said.

The two men had previously worked together at an asset management company.

"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," said US Attorney Jenny Durkan in Seattle, Washington.

"This conduct hurts companies, hurts individuals and shakes faith in our financial markets. We will vigorously investigate and prosecute this type of conduct."

Insider trading carries a penalty of up to 20 years in prison and a fine of up to $5 million, officials said.

Explore further: B&N, Microsoft team up on Nook, college businesses

Related Stories

B&N, Microsoft team up on Nook, college businesses

April 30, 2012

(AP) -- Barnes & Noble Inc. and Microsoft Corp. are teaming up to create a new Barnes & Noble subsidiary that will house the digital and college businesses of the bookseller and include a Nook application for Windows 8.

Microsoft eyes full control of Nook

May 9, 2013

Shares in Barnes & Noble surged Thursday after a report that Microsoft was preparing a $1 billion bid for the bookseller's Nook Media digital assets.

Nokia to pay outgoing CEO Elop $25 million

September 19, 2013

Nokia Corp. says it will pay outgoing CEO Stephen Elop a compensation package of some $25 million (19 million euros) when he leaves the company to move over to Microsoft.

Ballmer gets less than 'A' grade in compensation

October 4, 2013

Microsoft CEO Steve Ballmer was awarded 79 percent of his target bonus for the year through June as the software giant cited falling profits for its Windows division and sluggish sales of the Surface tablet.

Recommended for you

Computer model demonstrates how human spleen filters blood

June 27, 2016

Researchers, led by Carnegie Mellon University President Subra Suresh and MIT Principal Research Scientist Ming Dao, have created a new computer model that shows how tiny slits in the spleen prevent old, diseased or misshapen ...

Mapping coal's decline and the renewables' rise

June 23, 2016

Even as coal-fired power plants across the U.S. are shutting down in response to new environmental regulations and policy mandates, defenders of the emissions-heavy fuel still have cost on their side. Coal, after all, is ...

Electric racing car breaks world record

June 23, 2016

The Formula Student team at the Academic Motorsports Club Zurich (AMZ) accomplished its mission today: the grimsel electric racing car accelerated from 0 to 100 km/h in just 1.513 seconds and set a new world record. It reached ...

Flower power—photovoltaic cells replicate rose petals

June 24, 2016

With a surface resembling that of plants, solar cells improve light-harvesting and thus generate more power. Scientists of KIT (Karlsruhe Institute of Technology) reproduced the epidermal cells of rose petals that have particularly ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.