The U.S. Securities and Exchange Commission (SEC) has filed insider trading charges against three former Netflix software engineers and two associates, alleging that the group pocketed over $3 million in profits by using confidential information about Netflix subscriber growth to trade stocks.
According to the SEC, Sung Mo ‘Jay’ Jun was employed at Netflix in 2016 and 2017, and was at the center of the scheme. Jun also allegedly tipped information off to his brother, Joon Mo Jun, and a close friend, Junwoo Chon — who used encrypted messaging apps to discuss their activity.
After he left the company in 2017, Sung Mo Jun then received confidential subscriber growth info from two other Netflix engineers, Ayden Lee and Jae Hyeon Bae, according to the complaint.
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“The defendants allegedly tried to evade detection by using encrypted messaging applications and paying cash kickbacks,” Joseph Sansone, chief of the SEC’s market abuse unit, said in a statement. “This case reflects our continued use of sophisticated analytical tools to detect, unravel, and halt pernicious insider trading schemes that involve multiple tippers, traders, and market events.”
At the same time, the U.S. Attorney’s Office for the Western District of Washington has filed a criminal investigation into both Jun brothers, Chon, and Lee. All four have agreed to plead guilty, according to Variety.
