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A former Netflix engineer and his brother pleaded guilty to securities fraud for their roles in participating in an insider trading ring that generated more than $1 million in profit, the U.S. Attorney’s Office for the Western District of Washington said on Monday.
The ex-engineer, Sung Mo “Jay” Jun, and his brother, Joon Mo Jun, are expected to be sentenced on Dec. 3. According to the plea agreement, Sung Mo Jun used private information about Netflix’s subscriber numbers to tip off his brother and their close friend, Junwoo Chon, on buying and selling Netflix stock. After Chon made a profit, he paid Sung Mo Jun $60,000 in cash for his assistance, the U.S. Attorney’s Office for the Western District of Washington said.
After Sung Mo Jun left Netflix, he continued to obtain insider information about Netflix’s subscriber data from another engineer, Ayden Lee, and used that information to inform his own stock trading, as well as to continue tipping off his brother and friend, the attorney’s office said.
In total, Sung Mo Jun made $434,086 in profit, while his brother Joon Mo Jun made over $1.1 million from the insider information, according to the attorney’s office. Chon, who previously pleaded guilty earlier this month, made more than $1.6 million in profit while Lee — who has not yet had a plea hearing — is allegedly connected to $453,465 in illicit profits.
All four are also named in a separate civil case filed earlier this month by the Securities and Exchange Commission. In the criminal case, the former engineer and his brother face up to 20 years in prison and a $5 million fine for insider trading.
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