The Securities and Exchange Commission announced on Thursday that it has charged former Microsoft senior portfolio manager Brian Jorgenson and his friend/business partner Sean Stokke with insider trading ahead of company announcements.
They are also criminally charged by the U.S. Department of Justice.
According to the SEC, Jorgenson obtained confidential information about upcoming company news through his work in Microsoft's corporate finance and investments division. He then relayed the news to his friend and co-worker Stokke in advance of the announcements, the most recent in October. Stokke then traded his shares, and split the "illicit" profits with Jorgenson in their shared brokerage accounts. With the extra money at hand, the two made joint trading decisions with the goal of making enough money to create a hedge fund.
The trading actually first started before Microsoft announced its deal with Barnes & Noble's e-reader business in April 2012. Jorgenson told Stokke what was about to happen, so Stokke purchased around $14,000 worth of call options on Barnes & Noble common stock. Once the $300 million deal between Microsoft and the book retailer was announced, the stock price jumped up to $20.75 per share, a 51.68 percent increase. Stokke sold those shares immediately and made a profit of $185,000.
In July 2013, another scheme brought in $195,000, and one in October 2013 that only brought in a mere $13,000. Ultimately, the two made a combined $393,000 in profits. Now each have 35 felony counts of insider trading.
"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," the SEC reports. "The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and financial penalties against Jorgenson and Stokke as well as an officer-and-director bar against Jorgenson."
Microsoft reportedly fired Jorgenson when the company heard about the insider trading. The company also helped the government with its investigation. A spokesperson told The Seattle Times that Microsoft has "zero tolerance" when it comes to insider trading.
"I am sorry," Jorgenson said. "It was just greed. I was focusing too much on the material things. This is an aberration of who I am."
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Good. There's rampant insider trading. Unfortunately there isn't enough resources to go after the bulk of them so they focus on major cases like this one. Too bad they don't stop the nonsensical "War on Drugs" and instead of wasting time and resources arresting, prosecuting and incarcerating possession and minor trafficking charges and use it to cull the massive illegal trading on Wall Street.Reply
Maybe it is time to find another photo to use?Reply
The new design for the site is quite pleasant, but the old photos not as much.
I saw the picture and my first thought was.... "Former Microsoft employee now working at McDonald's"Reply
Willful wrongdoing such as this will continue until there are dire consequences for it. Head in a bucket to catch the mess, and pull the trigger. GAME OVER.Reply
Good, financial cheaters should be prosecuted. The thing that burns me up is that the cost to try them will most likely be far more than the $393k that they pilfered.Reply
Then you have the prolific psychopaths on Wall Street that nearly imploded our entire economy and got out of it by essentially holding a gun to the head of pensioners everywhere. There has not been ONE SINGLE prosecution of a hedge fund manager or Goldman executive. NOT ONE. All of these criminal psychopaths are still free and running the same scams at the expense of the 99.9% because they own the government. They gave themselves $billions in bonuses after running the most reckless ponzi scheme in history and then "saving the firm" by forcing the bailouts at the expense of us, our children and probably a generation or two beyond that.
"Regulatory capture" does not even begin to describe the sad state of our government and the banking nexus that operates it as it sees fit. A lot of people don't really understand the level of corruption and greed that led up to the 2008 crash, and that are still operating now (with even LESS regulation). Check out Griftopia by Matt Taibbi. It's like something I would expect from Hunter S. Thompson if he covered the financial crisis, so it is pretty entertaining while also horribly depressing.
@ Wemakeourfuture - Good insider traders are much better at hiding their trails than this Jorgenson n' buddy coalition. Funny how the basic criminal code is broken by most people (blue or white collar), Never repeat the same crime over and over to create a pattern. Heh...Reply
But crack is bad. Stealing fake money is still just fake money. I mean fiat currency.Reply
Yes I'm kidding. I'm with the poster above. Dissolve the DEA and pour all that into SEC.
There's no need to pour more taxpayer money into the SEC. Fine the perps into penury to fund SEC operations.Reply
...and then use the execution bucket on them.
Glad these guys got caught. Although I don't know if execution is a proper punishment or not.Reply
I do agree with the guys about the picture. You gotta find a new hamburgler pic or something else totally. This pic in no way even matches up to how funny that fat guy pic looks like in the "google makes it hard to find boobs" story.Reply