A former Microsoft executive and his friend are facing civil and criminal insider trading charges after allegedly pocketing nearly $400,000 from illegal trades.
The executive, Brian Jorgenson, 32, worked in Microsoft's corporate finance and investment division, according to the Securities and Exchange Commission, which is bringing the civil charges against him and friend Sean Stokke. The two also face up to 20 years in jail on federal criminal charges in U.S. District Court in Washington State. Authorities said they hoped to make enough money on the trades in order to start their own hedge fund.
Microsoft said Jorgenson was fired once the insider trading was discovered, and that it cooperated with authorities on the investigation. A spokesman said the company has "zero tolerance" for insider trading.
Jorgenson admitted to his wrongdoing in an extensive interview with the Seattle Times that was published Thursday morning.
He said it was simply greed that drove him to give information to Stokke, whom Jorgenson described in the article as an experienced day trader. Jorgenson told the paper that he did not know how much money his friend made on the trades, but that he personally received only $40,000 of the illegal profits.
The first illicit trade allegedly came after Jorgenson alerted Stokke about Microsoft's plan to invest in Barnes & Noble's Nook electronic book unit. The $300 million investment, announced in April 2012, sent shares of Barnes & Nobl (BKS)up more than 50% in a single day and netted the pair nearly a $185,000 profit, according to the complaint.