U.S. Securities and Exchange Commission sues three former Netflix engineers over insider trading


Netflix Inc updates

The US Securities and Exchange Commission sued three former Netflix engineers for insider trading, claiming that they made more than $3 million in profits through trading before the number of subscribers was publicly released.

With the development of the entertainment industry stream media Compared with traditional TV, subscriber growth has become the most important indicator for Wall Street to decide whether to buy or sell media stocks.

Netflix The stock may fluctuate significantly within a few days after earnings, depending on whether it adds more or fewer subscribers than expected.

according to SEC complaint In a lawsuit filed in Seattle federal court on Wednesday, engineer Sung Mo Jun provided subscriber information to his brothers and friends while working for Netflix in 2016 and 2017. They then use it to trade before Netflix earnings announcements.

The US Securities and Exchange Commission also stated that even after leaving the company in 2017, Mo Jun managed to obtain Netflix subscriber information from another Netflix engineer, Ayden Lee. The complaint alleges that Mo Jun himself used it to trade Netflix stock between 2017 and 2019.

Another former Netflix engineer, Jae Hyeon Bae, was also accused of leaking the Netflix subscriber number to Mo Jun’s brother before the company. July 2019 earnings releaseThe company’s quarterly report stated that the number of subscribers in the United States fell for the first time since 2011, evaporating Netflix’s market value by more than $15 billion-the most serious decline in its stock price in three years.

Irene Schneider, director of the US Securities and Exchange Commission’s San Francisco office, said that the organization “participated in a long-term, multi-million dollar plan to profit from valuable and stolen company information.”

The US Securities and Exchange Commission accused the three former employees of violating anti-fraud regulations. Schneider said these allegations will “make every participant accountable.”

Netflix CEO Reed Hastings (Reed Hastings) has made transparency a part of the company’s non-traditional corporate culture. The company shares its financial performance with “approximately 700” employees before the earnings release.

“We may be the only public company that shares financial results internally a few weeks before the end of the quarter,” Hastings said in his book. No rules: Netflix and reshaping culture.

“The financial community considers this to be reckless. But this information has never been leaked,” he wrote in a book published last year.


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