microsoft-building99Sean Stokke, an online stock trader from Seattle, has been sentenced to 1 1/2 years in federal prison after pleading guilty to charges of insider trading, according to a report by Reuters.

Federal prosecutors said Stokke used information fed to him by Microsoft manager Brian Jorgenson to make trades that earned the pair more than $400,000 in an 18-month period.

Stokke was charged last December.

Stokke cut a plea bargain with U.S. attorneys, and the prison sentence handed down by U.S. District Judge Marsha Pechman is in line with what the U.S. Attorney’s office requested, but well short of the 20 year maximum sentence for criminal insider trading. Stokke’s attorney had requested a lesser sentence, but Pechman said that the sentence was needed to “send a message” to other people who could be tempted to try something similar.

The pair started making the insider trades after Jorgenson told Stokke in 2012 about Microsoft’s plans to invest in Barnes & Noble. At the time, Stokke purchased options predicting that Barnes & Noble’s stock would rise, ahead of the announcement. The bookseller’s stock price jumped after Microsoft revealed its investment, and netted Stokke $184,000, which he shared with Jorgenson.

After that first score, prosecutors said the pair went on to take out options on Microsoft stock or an exchange-traded fund based on information about quarterly earnings reports that would surprise Wall Street investors.

Jorgenson, who was fired by Microsoft when the scheme came to light, is slated to be sentenced in the coming weeks.

Comments

  • jeff

    Throwing your life away for 400K.. I dont understand why you do that for so little money.

    • Will Difranco

      I agree with you.

      But these guys had been told, or shown, others doing it without getting caught. They were cocky and sloppy.

      Better to stay clear of this behavior, even if others can pull it off. You may end up with the Martha Stewart experience and made an example of.

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