- By Hamzakhan
- March 24, 2023
US Securities and Exchange Commission (SEC) has charged a Netflix insider trading ring comprised of three former Netflix employees. Former Netflix software engineers allegedly made more than $3M from insider trading, in which they acquired profits by trading on subscriber numbers before they were released publicly.
In the court papers, the two Netflix ex-staffers and their associates were mentioned.
The Wall Street Watchdogs said confidential Netflix subscriber growth data was used in the scheme.
Ex-staff members allegedly linked to the Netflix insider trading ring had used the information to trade streaming giant’s shares ahead of its earnings reports.
The US Securities and Exchange Commission (SEC) claimed that the former software engineer Sung-Mo Jun was the mastermind behind all the long-running schemes to illegally trade shares using insider information about the company’s subscriber growth.
The complaint showed that amid his career at Netflix in 2016 and 2017, he allegedly passed non-public information to his brother and a close friend who both used it to trade ahead of multiple Netflix earnings announcements.
The SEC also declared that after Sung-Mo Jun moved from Netflix, he obtained confidential subscriber growth information from two other company insiders.
“We allege that a Netflix employee and his close associates engaged in a long-running, multimillion dollar scheme to profit from valuable, misappropriated company information,” said Erin Schneider, director of the SEC’s San Francisco regional office.
The SEC said it uncovered the alleged scheme using data analysis tools to find suspiciously successful patterns of trading.
At the same time, a criminal case was filed against four of the defendants by the US Attorney’s Office for the Western District of Washington, which could lead to prison sentences.