Netflix Insider Trading Suspects Plead Guilty
Insider trading refers to the trading of shares by insiders based on undisclosed price-sensitive information (UPSI). It involves buying and selling shares of publicly traded companies using information that may have a significant impact on the share price but has not yet been made public.
Employees or key executives who have access to the company’s strategic information use the information to negotiate the company’s stocks or securities. This is known as misuse of inside information, and this is not recommended. The use of inside information is an unfair practice, and other shareholders are at a great disadvantage due to the lack of material non-public information about inside information. However, in some cases, if the information is disclosed to all relevant investors, it does not belong to insider trading.
A Washington man pleaded guilty to insider trading charges after prosecutors said he received $ 1.6 million in illegal income from information provided exclusively by Netflix employees. Junwoo Chon, 50, of Bellevue, will face 20 years in prison when he is sentenced on December 3. Trading based primarily on non-public information is a federal crime. In this case, Netflix will publish the number of quarterly subscribers, but in all other cases, it will keep them confidential. The authorities stated that Chon received information from his friend Sung Mo Jun. Sung Mo Jun worked as a software program engineer for Netflix in 2016 and 2017. In recent years, Chon has made valuable investments through quarterly communications. According to the announcement on Wednesday, the prosecutor also mentioned that Jun had provided information to his brother Joon Jun, “in which there is information indicating that the two used this knowledge to profit from buying and selling Netflix works.” U.S. Attorney from Seattle.
According to the prosecutor, Chon allegedly gave Sung Mo Jun $ 60,000 again and participated in a separate insider trading scheme involving an anonymous professional company. They said this plan earned him $ 2,000. Sung Mo Jun, 49, of Bellevue, is also accused of insider trading on Netflix shows; Joon Jun, 45, of Issaquah; and Ayden Lee, 33, of California. Prosecutors claimed that after Song Mojun left Netflix in 2017, Li allegedly took over the insider disclosure. Song Mojun allegedly used this information for his transactions. American Securities and Alternative Investments said in a statement Wednesday that it would pass it on to his brother and Chon “before Netflix’s earnings report.”
The US Securities and Exchange Commission confirmed that another suspect, Netflix engineer Jae Hyeon Bae, provided Joon Jun with information about subscriber growth before the company’s July 2019 earnings announcement. Bae has been charged in another civil enforcement case involving different charges against Chon, Sung Mo Jun, Joon Jun, and Lee.Federal prosecutors said the operation brought more than $3 million in revenue to the defendant. In the US Securities and Exchange Commission’s case, the defendant “agreed to announce the judgment” regarding no longer being exposed to insider trading and determining civil penalties. It is unclear whether the defendant has a non-public lawyer. The workplace of the federal public protection agency in western Washington state said that it is not clear whether they represent the children because the outcome of the case is recent.
