Seattle – A former Netflix software program engineer, and his finest good friend and co-conspirator have been sentenced at this time in U.S. District Court docket in Seattle for securities fraud for his or her roles in an insider buying and selling ring that generated greater than $3 million in unlawful proceeds, introduced U.S. Legal professional Nick Brown. Sung Mo Jun, 49, of Bellevue, Washington, was sentenced to 2 years in jail and a $15,000 high-quality. His good friend and co-conspirator Junwoo Chon, 50, of Bellevue, Washington, was sentenced to 14 months in jail and a $10,000 high-quality. On the sentencing hearings U.S. District Choose Richard A. Jones stated he hoped the jail time would deter others. “For folks within the excessive tech trade, they’ll clearly know that there are penalties – together with jail time – for this exercise,” Choose Jones stated.
“Insider buying and selling is a severe offense,” stated U.S. Legal professional Nick Brown. “Such conduct damages our monetary markets and erodes public belief as a result of the investing public must have religion that the markets present a good taking part in area to all individuals. Mr. Jun and Mr. Chon have been each financially safe with good jobs and good salaries when greed drove them to interrupt the regulation to extend their very own wealth, on the expense of others. Such conduct, won’t be tolerated.”
“Insider buying and selling undermines our capital markets, harms firms by misusing their confidential data, and causes buyers to lose religion within the equity of the system,” stated Donald M. Voiret, Particular Agent in Cost, Seattle Area Workplace. “The actions of this trusted worker and his good friend have been calculated and ongoing to reap an enormous revenue.”
In line with information filed within the case, from July 2016 to February 2017, Sung Mo Jun was employed by Netflix as a software program engineer. He had entry to subscriber knowledge and had been skilled by the corporate that such knowledge was materials, personal data. However, Jun disclosed that data to his brother Joon Jun, 45, of Issaquah, Washington, and his shut good friend, Junwoo Chon, figuring out that the 2 supposed to make use of the data to revenue on the acquisition and sale of Netflix securities. After Chon made important earnings on the securities, Sung Mo Jun requested Chon to offer Sung Mo Jun with $60,000 in money as Sung Mo Jun’s share of the earnings.
After Sung Mo Jun left Netflix, he obtained extra personal details about subscriber knowledge from one other Netflix worker, software program engineer Ayden Lee, 33, of San Jose, California. Jun not solely handed that data on to his brother and Chon, he additionally used it to make his personal trades. Between April 2017, and July 2019, Sung Mo Jun made a revenue of $434,086 by buying and selling in Netflix inventory and choices with this inside data. Between July 2016 and April 2017, Jun’s brother, Joon Jun, made $215,419 and co-conspirator Junwon Chon made $521,400. All advised, the insider buying and selling attributable to Solar Mo Jun in Netflix securities resulted in a bootleg achieve of $1,170,905. Chon is liable for illicit earnings of $1,642,855
Sung Mo Jun additionally obtained insider data from a “tipper” he knew at one other tech firm and shared this data along with his brother and Chon. Their earnings from buying and selling on that inside data was lower than $2,000.
Along with the jail sentences, each males shall be on one 12 months of supervised launch following jail and should full 50 hours of group service.
As Choose Jones imposed the sentence, he advised Jun “You had no cause to pursue this extra wealth, and but you selected to have interaction your brother and finest good friend on this scheme. There is only one cause: greed.”
Jun advised the court docket, “What I did was silly, flawed, unlawful…. I’ve no excuse. I disenchanted many individuals.”
Jun is forfeiting $495,188 to the U.S. and Chon is forfeiting $1,582,885 to the U.S. The forfeiture quantities are based mostly on the unlawful achieve by every defendant.
The 2 remaining conspirators shall be sentenced subsequent 12 months. Joon Jun is liable for illicit earnings totaling $1,106,208. Lee is linked to illicit earnings totaling $453,465.
The Securities and Change Fee (SEC) has filed a separate civil enforcement motion towards the defendants who’ve every entered into settlements with the SEC. Each males nonetheless face potential penalties from the SEC.
The case was investigated by the FBI and is being prosecuted by Assistant United States Legal professional Justin Arnold.