U.S. SEC, federal prosecutors charge former Netflix staffers with insider trading
Reuters
Published Aug 18, 2021 03:49PM ET
Updated Aug 18, 2021 04:51PM ET
By Katanga Johnson
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission (SEC) said on Wednesday it has charged three former engineers at Netflix Inc (NASDAQ:NFLX) with trading on nonpublic information around the company's subscriber growth that generated over $3 million in total profit.
The SEC's complaint, filed in federal court in Seattle, charges the streaming service's ex-staffers with violating antifraud provisions and trying to evade detection by using encrypted messaging applications. It also found that the staffers exchanged the information with relatives and friends so as to receive cash kickbacks in advance of several consecutive Netflix quarterly earnings, the SEC said.
The defendants may also pay fines, the SEC said.
In a parallel action, the U.S. Attorney's Office for the Western District of Washington filed a criminal information against the defendants, which could lead to time spent in prison.
"We allege that a Netflix employee and his close associates engaged in a long-running, multimillion dollar scheme to profit from valuable, misappropriated company information," said Erin Schneider, director of the SEC's San Francisco regional office. "The charges announced today hold each of the participants accountable for their roles in the scheme."
"This case reflects our continued use of sophisticated analytical tools to detect, unravel and halt pernicious insider trading schemes that involve multiple tippers, traders, and market events."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.