Netflix Insider Trading Scam: How Ex-Employees made Millions of Dollars; Check details

Netflix insider trading scam was recently revealed when five people, including three ex-employees of Netflix, used confidential subscriber growth information to trade in Netflix stock illegally and earned around $3.1 million. Securities and Exchange Commission recently filed a complaint against them. The five alleged accusers have been charged in the Federal Court of Seattle while four of them have agreed to plead guilty. 

All about the Netflix Insider Trading Scam

According to the reports by Netflix, as the five persons were illegally charged with civil counts of insider trading by the Securities and Exchange Commission, they have agreed to a civil judgement with the penalties imposed by the court. Sung Mo Jun, one of the alleged offenders, worked as a software engineer from 2013-2017. Complaint by SEC stated that he tipped off his brother, Joon Mo Jun and friend Junwoo Chon, about the company’s subscriber growth number. The SEC has claimed that  Joon Mo Jun and Chon used that information to trade on Netflix stock while Chon made $521,000 of which he shared $60,000 with Sung Mo Jun. The complaint also states that Joon Mo Jun made $215,000.

Another ex-employee, Ayden Lee, who worked as a software engineer at Netflix from 2016-2021 was repeatedly asked to provide Sung Mo Jun with confidential subscriber numbers. According to the complaint, Jun then shared the information with his friend and his brother and eventually, Chon made $1.1 million, Sung Mo Jun made $453,000, and Joon Mo Jun made another $813,000 on illicit trades. 

Sung Mo Jun was also friends with another Netflix employee, Jae Hyeon Bae, who participated with Chon, Joon Mo Jun and Sung Mo Jun in the Netflix insider trading case and connected through a messaging channel called “Rage Against the Market”, in which they discussed stock trades. Though Bae was only charged in the SEC complaint and not in any criminal case. 

Chon appeared in Federal Court on Wednesday and pleaded guilty for insider trading. His attorney released a statement in which he said that Chon was a ‘naturalized citizen’ from South Korea who has lived in the Puget Sound area since 1988 and has never previously been involved in criminal conduct. Attorney Todd Williams, who represented Joon Mo Jun, also released a statement in which he said that he had accepted responsibility for his actions detailed in the information filed by the Government and was looking forward to resolving the matter and moving on with his life. On the other hand, Lee’s attorney stated that his client did not profit at all from the scheme and was taking full responsibility for his actions. 

Spencer Wang, the VP of investor relations, has quoted in the book stating that the subscriber number was top-secret and could be used by investors to make a lot of money and that anyone at Netflix who leaked it could go to jail. He further revealed that he was shocked during the first week in the company when he received an email with the subscriber number included. When he asked the CEO about how many people had access to it, he stated that any employee could sign up for it.

IMAGE: DAVID BALEV UNSPLASH