Bellevue Man Pleads Guilty To Insider Trading Scheme

SEATTLE — A Bellevue man pleaded guilty Wednesday to federal securities fraud charges stemming from an insider trading scheme involving Netflix. Junwoo Chon, 50, is one of four people charged in the scheme and the first to enter a plea. Prosecutors allege he made more than $1.6 million from trades after two software engineers provided internal subscriber data ahead of Netflix earnings announcements.

The engineers, Sung Mo Jun, 49, of Bellevue and Ayden Lee, 33, of San Jose, were also charged in the case, along with Jun's brother, Joon Jun, 45, of Issaquah. Plea hearings for the brothers are scheduled later in the month.

Prosecutors allege Sung Mo Jun provided Chon and his brother with internal information between July 2016 and April 2017. After he left Netflix, prosecutors said Lee provided the other three with additional data, which they used to make more profits.

According to the U.S. Attorney's Office, Sung Mo Jun's and Joon Jun's profits exceeded $1.1 million each, Chon made more than 1.6 million and Lee made more than $450,000.

"Insider trading is not a victimless crime," said Tessa Gorman, acting U.S. Attorney for the Western District of Washington. "When someone on one side of the trade has non-public information, they have an advantage over the person on the other side — the person who ultimately loses money on their securities trade. The integrity of our financial markets demands a fair and level playing field."

Punishment for insider trading charges can include up to 20 years in prison and $5 million in fines. A judge will determine Chon's sentence at a future hearing. All four men face civil penalties from the Securities and Exchange Commission.