Wall Street watchdog has charged an ex-staff of Netflix charged for alleged insider trading.
Gatekeepers News reports that former Netflix software engineers and two close associates have been named in court papers over an alleged insider trading ring that made $3m (£2.2m).
According to the US Securities and Exchange Commission (SEC), the confidential Netflix subscriber growth data was used in the scheme.
Reports revealed that the information was allegedly used to trade the streaming giant’s shares ahead of its earnings reports.
The SEC alleged that Sung Mo Jun – the former software engineer at Netflix, was at the centre of a long-running scheme to illegally trade shares using insider information about the company’s subscriber growth.
While Sung Mo Jun was working for Netflix in 2016 and 2017, he repeatedly passed non-public information to his brother and a close friend who both used it to trade ahead of multiple Netflix earnings announcements.
According to the complaint, after Sung Mo Jun left Netflix, he also obtained confidential subscriber growth information from two other company insiders.
Director, SEC’s San Francisco regional office, Erin Schneider said, “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.”
SEC disclosed that it was able to uncover the alleged scheme using data analysis tools to find suspicious successful patterns of trading.
Similarly, the US Attorney’s Office for the Western District of Washington has filed a criminal case against four of the defendants, which could lead to prison sentences.
Insider trading is an act of buying and selling a listed company’s shares or other securities, such as bonds or share options, based on information that is not known to the public.
