Netflix Inc. (NFLX), the film-streaming and mail-order DVD service, was sued by shareholders who accuse the company of concealing increased costs it faced, which inflated its share price as insiders sold their shares for $90 million.
Netflix officers knew the company faced higher license fees from its content providers before announcing on Sept. 15 that it had lost 1 million subscribers after price increases, according to the complaint filed today in federal court in San Francisco.
“While Netflix stock was inflated partially by Netflix buying back its own stock, company insiders were selling 388,661 shares of their own Netflix stock for proceeds of $90.2 million,” according to the complaint.
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