Nextflix and fraud
As Netflix cracks down on subscribers who share passwords, its shareholders have filed a lawsuit against the streaming service for securities fraud.
In the suit, shareholders accuse Netflix of misleading them about difficulties retaining customers and contend they suffered significant losses because of Netflix’s misleading information.
Netflix reported in April it lost 200,000 subscribers and warned it could lose two million more, causing its stock to plunge 35%. However, Netflix had previously predicted it would gain 2.5 million subscribers and said business was strong. Shareholders
are seeking damages from stock losses.
The company recently announced plans to shore up losses by charging extra fees to subscribers who share their passwords with people outside their home. (See “Netflix Hit With Shareholder Lawsuit After Disclosing Subscriber Loss,”
by Winston Cho, The Hollywood Reporter, May 4, 2022, and “Netflix is finally going after password sharing. Here’s how it’s likely to work,” by Alex Sherman, CNBC, April 23, 2022.)
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