- Three former Netflix software engineers and two associates were charged with insider trading, the SEC announced Wednesday
- Those involved made over $3 million by sharing confidential information about the streaming giant's subscriber growth.
Three former Netflix software engineers and two associates were charged with insider trading in a multi-million-dollar scheme that used inside information on the streaming giant's subscriber growth, the SEC announced Wednesday.
According to the complaint, which named Sung Mo "Jay" Jun at the center of the scheme, the alleged perpetrators made over $3 million in profits by sharing confidential information through encrypted messaging applications between 2016 and 2019. The group allegedly traded ahead of 13 earnings announcements.
Between July 2016 and April 2017, Sung Mo Jun allegedly tipped the information to his brother, Joon Mo Jun, and his close friend, Junwoo Chon. They made trades prior to Netflix earnings announcements and Chon allegedly paid Sung Mo Jun $60,000 from the profits.
After leaving the company in 2017, Song Mo Jun continued to obtain information from insider Ayden Lee. Another Netflix engineer, Jae Hyeon Bae, allegedly tipped Joon Jun off ahead of Netflix's July 2019 earnings announcement.
In February 2018, Bae allegedly joined a Messaging Channel called "Rage Against the Market," which was hosted on a popular business communication platform. It included Sung Mo Jun, Joon Jun and Chon. Bae hoped to get information that "would help him make money trading securities," the complaint says.
Netflix's stock closed largely flat Wednesday.