Former Netflix employees charged with insider trading

Three former Netflix engineers have been charged with insider trading by the US Securities and Exchange Commission (SEC).

According to the body, the three former employees generated over US$3 million in profit by trading on nonpublic information around the streaming service’s subscriber growth. A federal court in Seattle, WA, has charged the three with violating antifraud provisions and trying to evade detection by using encrypted messaging applications.

In addition, the engineers have been accused of exchanging information with friends and family in order to receive cash kickbacks.

The SEC has said that the accused may be forced to pay fines, while the US Attorney’s Office for the Western District of Washington has filed criminal information against the defendants which could lead to prison time.

In a statement, the SEC San Francisco regional office’s director Erin Schneider, said: “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. 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.”