Why Netflix's Loss Could Be Yahoo's Loss, Too

Re/code recently published a story in which it revealed that Netflix, Inc. (NASDAQ: NFLX) is suing one of its former executives, who now works for Yahoo, for taking kickbacks from vendors.

CNBC's Julia Boorstin recently provided the details of the case.

"Netflix is suing its former Vice President of Information Technology Operations, Mike Kail, first reported by Re/code, alleging that he received kickbacks from vendors, accusing him of breaching fiduciary duties and of fraud. Now the allegations have implications for Yahoo, as well. After leaving Netflix in August, Kail joined Yahoo as its chief information officer and SVP of infrastructure," Boorstin said.

"Now Netflix alleges that Kail, who started working there in 2011, took kickbacks of 12 to 15 percent the monthly fees that Netflix paid to vendors adding up to approximately half a million dollars, having these fees paid to a consulting company he controlled called Unix Mercenary. Now that’s not all. Netflix says it believes Kail may have received benefits from other Netflix contractors quote ‘including among other things stock and/or gift cards.'"

Boorstin continued, “Now Netflix is asking for all the defendant’s ill gotten gains plus compensation and restitutions for damages and harm inflicted on the company as a result of his actions. [...] Now Netflix and Yahoo both declined to comment, though for Netflix the lawsuit speaks for itself. Kail’s representatives have not responded to requests for comment.”

Shares of Netflix recently traded at $350.59, up 0.46 percent.