Skynet recovers its negligence and does not leak, and 3 former Netflix engineers are accused of suspected insider trading

former Netflix engineer was accused of insider trading, and the restrained "high-tension line" must be tightened at all times

Recently, the U.S. regulator claimed in a complaint filed in the Seattle Federal Court that the former Netflix engineer and two colleagues were subjected to a "long-term plan" for obtaining confidential information about the growth of Netflix subscribers for an illegal profit of more than 3 million U.S. dollars. complaint.

According to the US Securities and Exchange Commission (SEC) complaint, the former employee employed by Netflix was named "Sung Mo'Jay' Jun". During 2016-2017, he repeatedly reported to his brother Joon Mo Jun and his close friend Junwoo. Chon revealed the company's non-public information, and then used the confidential information together to conduct transactions before Netflix issued multiple earnings announcements.

In response to the allegations that former Netflix employees designed insider trading, the US SEC complaint explained in more detail. Among them, it is said that after the employee left Netflix in 2017, he obtained confidential information about Netflix subscriber growth from another Netflix insider, Ayden Lee. From 2017 to 2019, Sung Mo Jun made a private transaction and provided information to Joon Jun and Chon before the Netflix earnings report was announced. At the same time, before the July 2019 financial report, another former Netflix colleague of Sung Mo Jun, Jae Hyeon Bae (also a Netflix engineer), provided non-public information to Joon Jun based on Netflix’s user growth information. It provides assistance in insider trading.

Although this incident has attracted the attention of many people in the industry, Netflix founder and co-CEO Reed Hastings explained in his book "No Rules" published in 2020 that the company has always Both are committed to creating a transparent office environment to keep employees motivated. He wrote:

"We may be the only public company to share financial results internally a few weeks before the end of the quarter."

"In this regard, the financial industry generally thinks that this is a reckless move. Because this private information has never been leaked, but when it is really leaked one day, we will not overreact. We will only deal with this one case and continue. Be transparent."

In recent years, the subscriber subscription data of Netflix, Disney and related companies has been at the core of the "turbulence" of Wall Street stock prices. Especially with the arrival of Netflix's new hot broadcast period, sensitive internal information of some platforms will often be deliberately disclosed by Netflix employees.

From 2016 to 2019, as Netflix expands globally, its stock price has more than tripled and its total number of users has also doubled. In the past few years, although it has to face increasingly fierce competition, its growth around the world is not so explosive, but it has 209 million paying users and it is still the leader of streaming media.

"scandals" of insider trading in the United States continue, and engineers have become "high-risk groups"?

For many years, the "scandal" of insider trading in the United States has existed. In the face of huge profit temptation, whether it is a trader who is familiar with the business or the software engineer behind it, it is easy to become a "high-risk person" for insider trading crimes. In addition to this time the former software engineer of Netflix was involved in insider trading, there were also many media reports that former engineer employees were fined for illegal insider trading.

In 2017, foreign media reported a piece of news about engineers reaching a settlement on Apple's acquisition of insider trading. A senior network administrator, John Stimpson, who worked for Melbourne fingerprint sensor manufacturer AuthenTec in 2006, used his position to obtain some important private information about the acquisition process during the company’s acquisition by Apple in 2012. Purchase multiple call options and sell the call options within one week after the acquisition. Subsequently, the US Securities and Exchange Commission (SEC) complained, and the case ended with John Stimpson agreeing to pay a fine of US$278,773.

In March of this year, the U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC) announced that an engineer from the world’s wealthy Musk Space Exploration Technology (SpaceX) had conspired with others to commit bond fraud for selling insider trading on the “dark web”. Information and be complained. In the end, the engineer was sentenced to a maximum sentence of 5 years in prison, and the follow-up of the case has always attracted attention from the outside world.

False disclosure and insider trading, these are illegal means of artificial market manipulation, which will seriously affect the healthy development of the capital market. Although the restrictions on insider trading in the United States have a long history, it is impossible to guard against the escalating methods and forms of insider trading. Therefore, the regulatory authorities must continue to restrict such crimes.

supervision of insider trading is strict, and Skynet has

The United States’ regulations on insider trading regulations date back to 1909. The Supreme Court of the United States clearly ruled that the use of information not known to the public by directors to purchase stocks from outside investors constituted fraud (Strong v. Repide). Article 16b of the Securities Exchange Act of 1934 restricted the short-term trading of insiders, and Article 10b of the Securities Exchange Act became the cornerstone of the development of anti-insider trading laws in the United States since then.

In dealing with insider trading crimes, in addition to the real-time monitoring of the market by the Securities Regulatory Commission and exchanges, companies and institutions in the U.S. securities industry also have codes of conduct to restrict them, and through these regulations and regulations, they jointly carry out insider traders and the illegal behavior. Crack down hard.

As long as insider trading is involved, self-regulatory agencies from the US Securities Regulatory Commission to the New York Stock Exchange, the National Association of Dealers (NASD), the Options Regulatory Surveillance Authority (ORSA) and other self-regulatory agencies will form a joint binding agency, matching the legislation to form one A multi-level law enforcement system is used to monitor the market in real time, and then the companies and institutions involved in the securities industry are bound by the code of conduct to form the "Skynet".

The legislative constraints on insider trading range from company insiders to "temporary insiders" who have inside information. Just like the former Netflix employee mentioned at the beginning, if you are not a company executive, even people who get information from the side can be guilty. Multiple "high-tension wires" make the US insider trading supervision more stringent than most countries.