Prosecutors claimed he gained $1.6 million in illicit profit on copyrighted subscriber data supplied by a Netflix employee, and he agreed to plead guilty to criminal insider trading charges on Wednesday.
When Junwoo Chon, 50, of Bellevue, gets sent to imprisonment on December 3, he could stand up to 20 years in jail. Prosecutors allege he utilized non-public details about current subscriber figures to acquire Netflix “call options,” which allows participants to benefit by purchasing a share in the future at the current price.
Chon obtained the knowledge through his partner Sung Mo Jun, a Netflix systems developer in 2016 and 2017, when Chon executed the successful bets ahead of quarterly releases, according to authorities.
As per a report published on Wednesday by the US Attorney general’s Office in Seattle, Jun also supplied the material to his brother, Joon Jun, “with the understanding that the two planned to utilize the insights to profit on the buying and selling of Netflix stocks.”
Chon reportedly paid Sung Mo Jun $60,000 and participated in another insider-trading scam with an unidentified technological business, according to prosecutors. According to them, he made $2,000 from the scam. Sung Mo Jun, 49, of Bellevue, Joon Jun, 45, of Issaquah, and Ayden Lee, 33, of San Jose, California, are indeed arrested with insider trading in the Netflix scam.
Investigators claim Lee took over the distribution of inside data when Sung Mo Jun left. He reportedly began trading himself after leaving Netflix in 2017 and continued to receive top secret information from colleague Netflix software developer Ayden Lee. Jun made $453,000 in two years, Joon made $813,000 in two years, and Chon made $1.1 million in two years. The US Security and Exchange Committee said in a statement Wednesday that Sung Mo Jun allegedly utilized the knowledge for his personal trading while sending it on to his brother and Chon “in advance of Netflix earning announcements.”
According to the SEC, another suspect, Netflix programmer Jae Hyeon Bae, provided user growth statistics to Joon Jun before the company’s July 2019 financial report. Additional charges against Chon, Sung Mo Jun, Joon Jun, and Lee have been filed in a wrongful discharge regulatory action.
Thus, according to federal authorities, the scheme garnered the accused more than $3 million. The defendants in the SEC’s lawsuit have “consented to the entry of judgments,” which includes committing never to participate in insider trading once more and civil fines that are about to be established.
It’s unknown if the defendants have hired private lawyers. Since this case was so new, the national prosecutor’s office in western Washington state said it wasn’t clear if it would represent the individuals.
