A former U.S. corporate executive who traded on inside information — including his own looming termination among a wider round of layoffs — has been sentenced to prison for securities fraud.
According to court filings, in 2022, Paul Jorgensen — the former chief revenue officer for a public tech company, Doximity — began trading on confidential information about his company’s financial results and outlook.
In particular, he sold over 61,000 shares of the company’s stock ahead of the company’s earnings call on Aug. 4, 2022, after learning about weak sales results, avoiding more than US$300,000 in losses on the company’s stock — which fell by approximately 7% after the news was announced.
The following year, ahead of news of corporate layoffs — including his own pending termination — Jorgensen again traded on his insider knowledge, earning US$2.3 million in illicit profits from stock and options trades.
In January, Jorgensen pleaded guilty to securities fraud, and he has now been sentenced to 26 months in prison, followed by two years of supervised release, and ordered to forfeit over US$2.5 million by a U.S. district court judge in New York.
In March, Jorgensen also settled with the U.S. Securities and Exchange Commission (SEC), which had filed a parallel civil case — consenting to a permanent injunction, and monetary sanctions (disgorgement and civil penalties) to be decided later upon application of the SEC.