A former Netflix software engineer and his friend were sentenced to prison for conducting an insider trading scheme that made more than $3 million
A former Netflix software engineer and his friend were sentenced to prison for an insider trading scheme where they used private subscriber data to make more than $3 million.
Sung Mo Jun, the former Netflix employee involved in the scheme, was sentenced to two years in prison while his friend, Junwoo Chon, was sentenced to 14 months on Friday, according to Seattle federal prosecutors. Jun and Chon were collectively fined $25,000 for their crimes.
Both Jun and Chon pled guilty to the charges in August. Another software engineer at Netflix and Jun's brother were also involved and have additionally pled guilty, according to a statement from the US Attorney's Office in the Western District of Washington.
"Insider trading undermines our capital markets, harms companies by misusing their confidential information, and causes investors to lose faith in the fairness of the system," Donald M. Voiret, the special agent in charge of the case, said in the statement. "The actions of this trusted employee and his friend were calculated and ongoing to reap a huge profit."
When Jun was a software engineer for Netflix, he gave private Netflix subscriber data to Chon and his brother, Joon Jun. They then profited by buying and selling Netflix securities based on the information.
After Jun left Netflix in 2017, another engineer that he mentored at the company, Ayden Lee, continued to give him private subscriber information, according to court documents. Joon Jun and Lee are scheduled for sentencing next year.
"What I did was foolish, wrong, illegal…. I have no excuse," Jun told the court, according to the press release. "I disappointed many people."
US Attorney Nick Brown said in a statement that the individuals involved were motivated by greed and will be required to face the consequences.
"Mr. Jun and Mr. Chon were both financially secure with good jobs and good salaries when greed drove them to break the law to increase their own wealth, at the expense of others," Brown said in a statement. "Such conduct, will not be tolerated."
The US Securities and Exchange Commission has filed a separate civil enforcement action against the defendants. Though Jun and Chon have entered into settlements with the SEC, but both men still face additional potential penalties.
"For people in the high tech industry, they will clearly know that there are consequences — including prison time — for this activity," Judge Richard Jones, who presided over the case, said in a press statement.