Former Corporate Executive Pleads Guilty To Multimillion-Dollar Insider Trading Scheme

 

Former Chief Revenue Officer Paul Jorgensen Admits to Repeated Illegal Trading in Doximity in Advance of Quarterly Earnings Calls

United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today that PAUL JORGENSEN pled guilty to committing securities fraud in connection with a multimillion-dollar scheme to trade in stock and options of Doximity based on inside information in advance of the company’s quarterly earnings calls.  JORGENSEN pled guilty today before U.S. District Judge Katherine Polk Failla.   

“Paul Jorgensen repeatedly used Doximity’s confidential information to trade in advance of the company’s quarterly earnings calls, earning himself more than $2.5 million in illegal profits,” said U.S. Attorney Jay Clayton.  “Corporate executives should be working for the benefit of the companies and shareholders they serve, not scheming to line their own pockets by trading on inside information.  Together with our law enforcement partners, we will continue to protect our financial markets and prosecute those who misuse non-public information.” 

“Paul Jorgensen repeatedly leveraged nonpublic information to conduct illegal trades from an unauthorized personal account, garnering millions of dollars in illicit proceeds,” said FBI Assistant Director in Charge Christopher G. Raia.  “The defendant’s actions greatly exploited his position of trust for his own personal gain, even as he learned he was likely to be terminated from the company.  May today’s plea emphasize the FBI’s commitment to protect companies from internal executives who prioritize personal wealth over their duty to company shareholders.”

According to the allegations contained in the Information and statements made in public court proceedings:

JORGENSEN engaged in a scheme to reap illegal profits by trading on material non-public information regarding Doximity, a publicly traded company, in violation of the duties of trust and confidence owed to the company and its shareholders.

Doximity is an online networking service for medical professionals that trades on the New York Stock Exchange under the ticker symbol “DOCS.”  JORGENSEN joined Doximity in 2017 and became Chief Revenue Officer in 2022.  As a senior executive at Doximity, JORGENSEN had access to confidential information about Doximity’s financial outlook, performance, and earnings results, and owed a duty of trust and confidence to the company.  Doximity restricted its employees from trading in the lead-up to the company’s quarterly earnings calls, and from engaging in options trading.  Doximity further required all employees to hold their Doximity shares in company-monitored brokerage accounts.

In July 2022, as Chief Revenue Officer, JORGENSEN became aware that Doximity’s add-on sales to clients, referred to as “upsells,” had declined over the previous quarter.  On July 28, 2022, JORGENSEN attended a Board meeting in advance of the upcoming earnings call in which the company’s negative results were discussed.  Following the Board meeting, JORGENSEN texted a close family member that he was “[n]ot selling [his] DOCS shares” because he had “non-public confidential info and it’s just not right to sell.”  Two days later, however, after JORGENSEN learned that he had been reassigned to a sales role at the company, JORGENSEN texted the same family member that he “decided to sell [his] DOCS shares” because he needed to “protect us first and foremost.”  The following day, JORGENSEN sold 61,162 shares of Doximity that he secretly held in a personal brokerage account.

During the company’s quarterly earnings call on August 4, 2022, Doximity publicly announced its negative results regarding upsells and lowered its annual guidance by six percent.  Doximity’s share price fell by approximately seven percent, and JORGENSEN avoided losses of more than $300,000.

In 2023, JORGENSEN again traded based on Doximity’s confidential information.  In July 2023, JORGENSEN became aware that Doximity’s upsells had continued to decline over the previous quarter.  In addition, on July 13, 2023, JORGENSEN learned that he was being terminated as part of a larger round of layoffs, and that the layoffs would be announced on the company’s upcoming quarterly earnings call.  In advance of the earnings call, JORGENSEN sold 15,000 shares of Doximity stock, earning $114,000 in illicit profits, and 1,300 call options, earning an additional $200,000 in illicit profits.  JORGENSEN also purchased 4,700 put options using his personal brokerage account.

During the company’s quarterly earnings call on August 8, 2023, Doximity publicly announced its company layoffs and negative results regarding upsells and lowered its annual guidance by eight to nine percent.  Doximity’s share price fell by approximately 23 percent.  Following the earnings call, JORGENSEN closed out his put position, earning nearly two million dollars in illicit profits.  JORGENSEN was terminated from Doximity in August 2023.

JORGENSEN, 53, of Charlotte, North Carolina, pled guilty to two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison.           

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  JORGENSEN is scheduled to be sentenced by Judge Failla on May 21, 2026.

Mr. Clayton praised the outstanding work of the FBI.  Mr. Clayton also thanked the U.S. Securities and Exchange Commission for its cooperation and assistance in this investigation. 

The case is being handled by the Office’s Securities and Commodities Fraud Task Force.