Former Netflix Team Member Billed $3 Million In Domestic Trade.
Key Sentence:
- The Wall Street Guardian has accused three former Netflix software engineers of an alleged internal trading network that made $3 million (£2.2 million).
The US Securities and Exchange Commission announced that the program had used sensitive data about Netflix subscriber growth. It is alleged that the information was used for trading shares of the streaming giant ahead of its earnings report. The SEC claims that Sung-Mo Jun, a former software engineer at Netflix, was at the center of an old stock trading system that used inside information about the company's customer growth.
According to the complaint, while working for Netflix in 2016 and 2017, he repeatedly disclosed non-public information to his brother and a close friend, both of whom traded him before many of Netflix's winning announcements.
AFTER LEAVING NETFLIX, the SEC also claimed that Sung-Mo Jun obtained confidential subscriber growth information from two other company insiders.
"We claim a Netflix team member and a close associate engaged in a long-term, multi-million dollar program to profit from valuable misinformation about the company," said Erin Schneider, director of the SEC's regional office in San Francisco.
The SEC said it had uncovered the alleged scheme and used data analysis tools to identify suspicious trading patterns. Meanwhile, the US Attorney's Office for the Western District of Washington has opened criminal proceedings against the four defendants, resulting in prison terms.
What is domestic trade?
Domestic trading is the buying and selling of shares in public companies or other securities such as bonds or stock options based on information that is not publicly available. Insider trading is illegal in countries, including the United States and the United Kingdom, as it is an unfair advantage to those with access to the information.
While rules and sanctions vary worldwide, someone who knows and trades non-public information can be subject to sanctions and possibly prosecution by financial market regulators in many jurisdictions. The definition of inside information is often broad. For example, it can include people who have direct access to confidential information and people with whom they share it and who make business decisions based on that information.