On Thursday, Brian Jorgenson, who is an executive at Microsoft, and his business partner friend Sean Stokke have been charged with insider trading. They are being charged for making a total of $393,125 USD from insider information acquired through Jorgenson’s job at Microsoft as a portfolio manager.
The first instance was in April of 2012, when Jorgenson told Stokke about Microsoft planning to invest 300 million USD into the e-reader business of Barnes & Noble. Stokke invested in Microsoft they made their announcement on April 30, and after the stock rose by 51 percent, the two made $185,000 USD.
The second instance occurred in July of 2013. Jorgenson had written an analysis that detailed a projected stock drop of six percent after Microsoft announced that their earnings were below what had been estimated. He informed Stokke about this, who then bought an option that gave him the ability to profit from the drop of a share price. Through this option the two made more than $195,000 USD.
“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,” Jenny Durkan, who is a US Attorney 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.”
If convicted the pair could have to pay a fine that could go as high as USD 5 million, and face up to 20 years in prison.
[via Zee News, image via Amit Chattopadhyay’s flickr]