Former software engineers at Netflix are being sued by the streaming service for allegedly trading insider information. The scandalous scheme reportedly earned them a staggering $3 million.
The staffers face charges by the Wall Street watchdog, who brought the allegations to light. Furthermore, The US Securities and Exchange Commission (SEC) claim they leaked Netflix’s confidential subscriber growth data. Usually, the streaming service is very tight-lipped about their subscriber count and more.
Former software engineer Sung-Mo Jun was allegedly helming this illegal trading of secret information and leaking this private data regarding the company’s subscriber growth.
Sung worked for Netflix from 2016 to 2017, and this is when he allegedly repeatedly passed on classified information to his friend and his brother. Before Netflix announced their earnings, Sung reportedly collected this precious data for insider trading purposes.
Insider trading refers to the buying and selling company shares, securities, bonds, and more using classified information not accessible to the general public.
The act is illegal in vast swathes of countries, including the UK and the USA. It provides an unfair advantage to the ones with the foreknowledge of the given information. While penalties may vary, defendants may face legal charges and criminal prosecution, leading to prison sentences.
Even after he left Netflix, SEC alleges him of obtaining the subscriber growth rate information from two other close associates within the company.
The director of SEC at San Francisco, Eric 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”.
The SEC had allegedly stumbled upon the scheme by using data analysis tools to detect the suspiciously profitable trading patterns.
Subsequently, the US Attorney’s Office for the Western District of Washington has filed a criminal complaint against the four defendants, which can even lead to imprisonment.
More as this story continues to develop.