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: Microsoft eyes full control of Nook

Related Stories

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.

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.

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.

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.

Recommended for you

Researchers 3-D print electronics and cells directly on skin

April 25, 2018

In a groundbreaking new study, researchers at the University of Minnesota used a customized, low-cost 3D printer to print electronics on a real hand for the first time. The technology could be used by soldiers on the battlefield ...

Balancing nuclear and renewable energy

April 25, 2018

Nuclear power plants typically run either at full capacity or not at all. Yet the plants have the technical ability to adjust to the changing demand for power and thus better accommodate sources of renewable energy such as ...

Electrode shape improves neurostimulation for small targets

April 24, 2018

A cross-like shape helps the electrodes of implantable neurostimulation devices to deliver more charge to specific areas of the nervous system, possibly prolonging device life span, says research published in March in Scientific ...

China auto show highlights industry's electric ambitions

April 22, 2018

The biggest global auto show of the year showcases China's ambitions to become a leader in electric cars and the industry's multibillion-dollar scramble to roll out models that appeal to price-conscious but demanding Chinese ...

After Facebook scrutiny, is Google next?

April 21, 2018

Facebook has taken the lion's share of scrutiny from Congress and the media about data-handling practices that allow savvy marketers and political agents to target specific audiences, but it's far from alone. YouTube, Google ...

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.