Former Netflix employees charged with insider trading and illegally using subscriber growth data


U.S. regulators on Wednesday charged five people, including three former Netflix employees, with insider trading charges, alleging illegal use of sensitive subscriber growth data for the streaming television giant.

The Securities and Exchange Commission said the group made $ 3 million in total profits from trading inside information from three ex-Netflix software engineers.

“We claim a Netflix employee and his close associates were involved in a long-running, multi-million dollar program to gain valuable, misappropriated corporate information,” said Erin Schneider, director of the SEC’s San Francisco regional office.

Joseph Sansone of the SEC’s Market Abuse Unit said the group tried to avoid detection by using encrypted messaging applications and paying for cash kickbacks.

“This case reflects our continued use of sophisticated analytical tools to detect, detect and stop malicious insider trading systems involving multiple tipsters, traders and market events,” Sansone said in a statement.

According to the SEC’s complaint, Sung Mo “Jay” Jun was at the center of a longstanding plan to illicitly trade nonpublic information while employed by Netflix in 2016 and 2017.

Jun shared this information with his brother, Joon Mo Jun, and a friend, Junwoo Chon, who were both trading it in the lead up to several Netflix earnings reports.

After Jun 2017 left Netflix, he received confidential information about Netflix subscriber growth from another Netflix insider, Ayden Lee, according to the SEC.

The SEC alleged that Sung Mo Jun’s former Netflix colleague Jae Hyeon Bae, another Netflix engineer, provided the inside information on subscriber growth ahead of Netflix’s July 2019 earnings announcement.

The agency said the five agreed to a court settlement that would exclude them from further violations and impose indefinite civil penalties.

The US prosecutor’s office has filed separate criminal charges against Sung Mo Jun, Joon Jun, Chon and Lee, officials said.


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