Two Seattle-area men were charged Thursday in U.S. District Court with 35 counts of insider trading related to their purchases and sales of stock options related to Microsoft.
Brian Jorgenson, of Lynnwood, was a senior manager in Microsoft’s treasury group. The other, Sean Stokke, of Seattle, was a day trader who had previously worked with Jorgensen at an asset management company, according to the U.S. District Attorney’s office.
The federal complaint alleges that the two used non-public information from Jorgenson’s employment at Microsoft to profit on the movement of Microsoft stock and the stock of related companies.
Jorgenson, 32, and Stokke, 28, were scheduled to appear in U.S. District Court in Seattle at 3 p.m. Thursday.
“This conduct hurts companies, hurts individuals, and shakes faith in our financial markets,” U.S. Attorney Jenny A. Durkan said in a statement. “We will vigorously investigate and prosecute this type of conduct.”
Investigators said the men profited on three distinct instances of insider information: Microsoft’s investment in Barnes and Noble; Microsoft’s failure to meet earnings estimates in the fourth quarter of fiscal 2013; and Microsoft’s increased first quarter earnings in fiscal 2014.
The men allegedly shared their profits by Stokke providing Jorgenson with envelopes of cash in approximately $10,000 increments, Durkan and her staff said.
“The high density of publicly traded companies in Seattle affords a large number of people access to insider information that can unfairly benefit their investment decisions,” FBI Special Agent-in-Charge Laura M. Laughlin said in a statement. “While most employees will never exploit that knowledge, our FBI office is particularly attentive to uncovering when and where this type of fraud occurs.
“We have seen many types of schemes and evasion techniques by inside traders, but they all share an erroneous belief that they’ll never be caught.”
Jorgenson no longer works at Microsoft. The penalty for insider trading is up to 20 years in prison and up to a $5,000,000 fine.