Former Microsoft Manager Charged with Insider Trading Ahead of Acquisition of Nokia
The Securities and Exchange Commission (SEC) announced on March 18, 2016 that former Microsoft Corporation senior manager, John Hardy III has agreed to pay nearly $380,000 to settle charges that he traded on material nonpublic information about Microsoft’s acquisition of Nokia Corporation’s mobile phone business and Microsoft’s year-end 2013 earnings release.
In its insider trading complaint filed in federal district court in Seattle, the SEC alleges that Hardy, who worked in Microsoft’s corporate financial planning and analysis group, purchased Microsoft put options after learning from highly confidential internal Microsoft documents, including a draft presentation to Microsoft’s board of directors, that the company’s fiscal-year 2013 financial results would not meet Wall Street analysts’ expectations. When Microsoft issued a July 18, 2013 earnings release containing those financial results, the company’s stock price decreased over 11%. Hardy sold the put options shortly after the announcement, realizing ill-gotten gains of approximately $9,000.
The SEC also claims that, in August 2013, Hardy purchased Nokia call options after learning in the course of his work in the financial planning and analysis group that Microsoft was planning to acquire Nokia’s mobile phone business. After the public announcement of the acquisition on September 2, 2013 caused the price of Nokia American Depositary Shares trading in the United States to rise more than 30%, Hardy sold the Nokia call options, resulting in illegal gains of approximately $175,000.
Hardy, of Redmond, Washington, is charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and has consented to the entry of a judgment permanently enjoining him from violating those provisions of the securities laws. Hardy has agreed to disgorge all of his ill-gotten gains of $184,132, pay a one-time civil penalty of $184,132, and pay prejudgment interest of $11,389 – a total of $379,653 – to resolve the charges, without admitting or denying the SEC’s allegations. Hardy has also agreed to a 5-year bar from serving as an officer or director of a publicly-traded company. The settlement is subject to court approval.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.