I have heard countless rationales through the years for why people engage in insider trading, but here is a new one courtesy of today's case filed by the SEC (and reportedly soon-to-be-filed by the U.S. Attorney) against a senior portfolio manager at Microsoft Corporation and his friend and business partner.

The Microsoft manager learned material, nonpublic information through his job and wrestled with the decision on whether to share this information with a friend so that they could both profit off of the information before it became public. According to an article in the Seattle Times, the Microsoft employee, Brian D. Jorgenson "struggled" with the decision, but "lied to himself” that it was okay because ... wait for it ... "'I told myself, ‘Members of Congress can do it.'"

Jorgenson was presumably referring to the loophole discussed here many times that arguably prevented members of Congress from being held liable for insider trading based on congressional knowledge because they did not owe any “duty of confidentiality” to Congress. After six years of trying, U.S. Rep. Louise Slaughter finally succeeded in closing this loophole when Congress passed the “Stop Trading on Congressional Knowledge Act” (the STOCK Act) in 2012. 

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