14 DAY TRIAL // Microsoft scored another big win in court on Friday, as Brian Jorgenson, a former company senior manager, received a two-year prison sentence for insider trading.
Brian Jorgenson worked together with friend and former co-worker Sean Stokke in a scheme that involved leaking insider information to make money in the stock market.
Jorgenson, 32, tipped his partner whenever he had information on the new moves prepared by the Redmond-based software giant in order to purchase or sell Microsoft stock based on these tips.
Jorgenson admitted in court that he offered information regarding Microsoft’s strategic moves at least three times in 18 months, estimating that their revenues reached at least $200,000 (150,000 euros).
It appears however that the duo actually made more money from making stock trades based on the insider information provided by Jorgenson. It all started with Microsoft’s investment in Barnes and Noble, which brought them back no less than $184,000 (137,000 euros), while the company’s announcement of lower than expected earnings in July 2013 generated a profit of $218,000 (162,000 euros).
Finally, in the first quarter of fiscal year 2014, Microsoft revealed a 17 percent increase in earnings per share, which was another opportunity for the two to trade stock.
“One day before the announcement, Stokke used brokerage accounts controlled by the two men to purchase call options of a technology sector fund that is influenced by the price of Microsoft stock. Following the earnings announcement, Microsoft stock and thus the sector fund went up. The men executed their options and sold the shares for a profit of nearly $13,000,” court documents show.
U.S. Attorney Jenny Durkan explained that this case must be a warning for all those who thought that insider trading could make them make some money the easy way, explaining that there were lots of employees with access to critical information for large companies based in the United States, so the risk was enormous.
“Motivated by greed, this defendant traded on his employer’s confidential information to line his own pocket. Western Washington abounds in publicly traded companies with thousands of insiders who have daily access to market moving information. The sentence in this case should serve as a warning to others who might be tempted to engage in this conduct,” he said.
Microsoft obviously was pleased with the outcome of the lawsuit and explained that it would show no mercy in the future if similar cases occur. Jorgensen was obviously fired already from Microsoft and will most likely have a really hard time finding a job when he gets out of prison.
“Our company has zero tolerance for insider trading. We helped the government with its investigation and terminated the employee,” the company said.