On Wednesday, US regulators filed insider trading charges against five people, including three former Netflix employees, accusing them of illegally using sensitive data about the streaming giant’s subscriber growth. television.
The Securities and Exchange Commission said the group generated $3 million (about Rs. 22 crores) in total profits trading insider information for three former Netflix software engineers.
“We allege that a Netflix employee and his close associates were involved in a long-standing multimillion-dollar scheme to profit from the company’s valuable and inappropriate information,” said Erin Schneider, director of the SEC’s San Francisco regional office.
Joseph Sansone of the SEC’s Market Abuse Unit said the group tried to evade detection by using encrypted messaging applications and paying cash bribes.
“This case reflects our continued use of sophisticated analytic tools to detect, unravel and stop harmful insider trading schemes that involve multiple vendors, brokers and market events,” Sansone said in a statement.
According to the SEC complaint, Sung Mo “Jay” Jun was at the center of a long-standing scheme to illegally trade in non-public information while working at Netflix in 2016 and 2017.
Jun revealed this information to his brother, Joon Mo Jun, and a friend, Junwoo Chon, who used it to trade ahead of several Netflix earnings announcements.
After Jun left Netflix in 2017, he obtained confidential information on Netflix subscriber growth from another Netflix insider, Ayden Lee, according to the SEC.
The SEC claimed that Sung Mo Jun’s former Netflix colleague Jae Hyeon Bae, another Netflix engineer, provided inside information about subscriber growth ahead of Netflix’s July 2019 earnings announcement.
The agency said the five had consented to a court settlement, which would prevent them from further violations and impose indeterminate civil penalties.
Separate criminal charges have been filed by the US Attorney’s Office against Sung Mo Jun, Joon Jun, Chon and Lee, authorities said.