Ex-Nielst staff charged with making $3m using insider information
Trading

Ex-Nielst staff charged with making $3m using insider information Trading

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The Wall Street watchdog has charged three former Netflix software engineers over an alleged insider trading ring that made $3m (PS2.2m).

Court papers named two associates and ex-staff.

According to the US Securities and Exchange Commission, confidential data about Netflix subscribers’ growth was used for this scheme.

This information was used to trade streaming giant shares in advance of earnings reports.

Sung Mo Jun was a former Netflix software engineer and the SEC claimed that he was involved in a scheme to trade illegal shares by using information on the subscriber growth.

The complaint states that he passed confidential information while working at Netflix in 2016/2017 to his brother, and to a friend. They both then used the information to trade before multiple Netflix earnings announcements.

SEC claimed that Sung Mo Jun also obtained secret subscriber growth data from two company insiders after he left Netflix.

Erin Schneider (director of the SEC San Francisco region office) stated that they allege that Netflix employees and their close associates participated in a multimillion-dollar scheme to make money from company information.

SEC claimed it discovered the scheme by using data analysis tools that allowed them to identify suspicious patterns in trading.

The US Attorney’s Office for Washington Western District filed criminal charges against the four defendants at the same time. This could result in prison sentences.

What is insider trading?

Insider trading refers to buying or selling shares of listed companies or securities such as bonds, options or stocks based upon information not readily available.

Insider trading, which is legal in many countries including the US, UK and Canada, is considered unfair because it gives an unfair advantage to people who have access to information.

Although the penalties and rules vary from one country to another, anyone who knows of trades or non-public information may face penalties and criminal prosecution.

A definition of insider is often broad and can include anyone who has direct access to confidential information, as well as those with whom they share the information and make trading decisions using that information.

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Publited at Thu, 19 August 2021 05.28:21 +0000

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