SEATTLE (AP) — Federal authorities filed criminal and civil charges Thursday against a former Microsoft manager, saying he fed inside information to a day trader who used it to clear $393,000 in illicit transactions.
Brian Jorgenson, 32, was a senior manager in Microsoft Corp.'s Treasury Group when he provided the information to his friend Sean Stokke, 28, according to documents filed in U.S. District Court in Seattle. They're accused of trading on three corporate developments: two recent quarterly earnings reports, and Microsoft's 2012 investment in Barnes & Noble Inc.
"Brian's approach to this is, he needs to make it right," said Jorgenson's attorney, Angelo Calfo. "He made a really bad decision, and he's prepared to take his medicine."
A message seeking comment was left for Stokke's attorney, Jennifer Horwitz.
The pair planned to use the proceeds to open their own biotech hedge fund, FBI agent Kathleen Moran wrote in the criminal complaint, which charges Jorgenson and Stokke with 35 counts of insider trading.
Both confessed when questioned, Moran wrote, adding that Stokke said he had given Jorgenson about $50,000 in cash out of the proceeds, in $10,000 increments, packed into envelopes.
The pair accumulated Barnes & Noble stock options in advance of Microsoft's announcement that it was investing in the company's digital book business, the FBI said. The announcement caused Barnes & Noble's stock to jump by nearly half, and the pair made $184,000.
They're also accused of trading on Microsoft's failure to meet earnings expectations in the fourth quarter of fiscal 2013 and Microsoft's increased first-quarter profit in fiscal 2014.