Netflix Sues A Yahoo Executive In Kickback Scandal

Netflix is suing former employee Mike Kail, now chief information officer at Yahoo Inc., for allegedly collecting kickbacks from companies he helped connect to the streaming-media giant during his time there. He stands accused in the civil case of fraud and neglect of fiduciary duty.

In his post as Netflix's vice president of information technology operations, which he held from October 2011 to August 2014, Kail set up Netflix contracts with two IT companies, Vistara and NetEnrich, and allegedly pocketed 12 percent to 15 percent of the fees paid to the companies each month. As Netflix paid a total of $3.7 million to the two companies until Kail left for Yahoo earlier this year, he is accused of collecting somewhere between $450,000 and $560,000.

According to Netflix's suit, Kail was in charge of approving the payments and routed them all through a company he controls, called Unix Mercenary — the company's billing address was Kail's home. He may have taken money from other companies as well; the Netflix complaint reads that "on information and belief, Kail may have received other benefits from companies that contracted with Netflix, including but not limited to, stock, gift certificates and cash."

A full copy of Netflix's complaint is embedded below.

Netflix v. Kail by jeff_roberts881