The U.S. attorney's office says the two men made $415,000 from three trades.
Brian Jorgenson, 32, was a senior manager in Microsoft Corp.'s Treasury Group when he provided the information to his friend Sean Stokke, 28, of Seattle, according to documents filed in U.S. District Court. They were accused of trading on three corporate developments: two quarterly earnings reports and Microsoft's 2012 investment in Barnes & Noble Inc.
"I cheated," Jorgenson told the court Friday. "I tried to take a shortcut for my own financial gain ... I persuaded myself it was a gray area, when it clearly was black and white."
Jorgenson's codefendant, Stokke, was sentenced last month to 18 months in prison.
"Western Washington abounds in publicly traded companies with thousands of insiders who have daily access to market-moving information," U.S. Attorney Jenny Durkan said. "The sentence in this case should serve as a warning to others who might be tempted to engage in this conduct."
The pair accumulated Barnes & Noble stock options in advance of Microsoft's announcement that it was investing in the company's digital book business, the FBI said. The announcement caused Barnes & Noble's stock to jump by nearly half, and the pair made $184,000.
They are also accused of trading on Microsoft's failure to meet earnings expectations in the fourth quarter of fiscal 2013 and Microsoft's increased first-quarter profit in fiscal 2014.
Jorgenson, a married father of four from the north Seattle suburb of Lynnwood, joined Microsoft in January 2011.
When Jorgenson was charged last December, Microsoft said in a written statement that the company has no tolerance for insider trading. "We helped the government with its investigation and terminated the employee," the statement said.