Former Netflix employees fined for insider trading
The US Securities and Exchange Commission (SEC) announced the founding guilt of 3 former Netflix software engineers and their two assistants, who earned more than $ 3 million using company insider information.
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 E. Schneider, Director of the SEC’s San Francisco Regional Office.
According to the regulator’s findings, the group’s brain was Sung-Mo Jun, who worked for Netflix in 2016-2017. Employed as a software engineer, he had access to classified information about the number of subscribers of the platform and decided to use it for insider trading. He involved his brother Joon Mo Jun and his close friend Junwoo Chon. Through an encrypted messenger, Sung-Mo Jun provided them with information on which they took positions in the market. The SEC said they had used them repeatedly in trading before announcing the company’s financial statements.
After leaving Netflix in 2017, Sung-Mo Jun did not want to deprive himself of an attractive source of income and hired a current employee into his group. His informant was Ayden Lee, who received money from him in return for information about subscribers. To reduce the risk of detection, group members only transferred cash. According to the SEC, the fifth person involved in the case was Jae Hyeon Bae, a former colleague of Sung-Mo Jun’s work, who participated in a one-time exchange of confidential information.
Insider trading related to Netflix’s results lasted until the second half of 2019. Sung-Mo Jun, Joon Mo Jun and Junwoo Chon made over $ 3 million thanks to him. After being detected by the SEC, the defendants went to a settlement that prohibited the repetition of violations. The court will decide further civil sanctions but will almost certainly include the return of all illegally earned money. Jae Hyeon Bae will pay a $ 72,875 fine.