A recent insider trading case involving Netflix employees shows the importance of providing employees training on how to comply with securities laws.
On December 3, 2021, a court sentenced former Netflix employee Sung Mo Jun to two years in prison for committing insider trading. The court also sentenced his friend and co-conspirator, Junwoo Chon, to 14 months in prison.
In 2016 and 2017, Jun worked as a software engineer at Netflix, where he had access to non-public subscriber data. Jun “tipped” information about subscriber data growth to his brother, Joon Jun, and his friend, Junwoo Chon, and they used that information to trade Netflix stock. They then shared with Sung Mo Jun a portion of the profits they made in their stock trades.
After leaving Netflix, Sung Mo Jun obtained additional subscriber data information from another Netflix employee, Ayden Lee. Jun used that information to make trades and he passed this information to his brother and friend. In total, the insider trading ring generated more than $3 million.
Insider trading laws prohibit anyone from trading securities based on material, non-public information. Publicly traded companies, and companies that provide services to publicly traded companies, should train all employees how to comply with insider trading laws. The training should be customized to each organization’s specific policies on insider trading.
Learn more about Clear Law Institute’s online insider trading course.