Netflix, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against Netflix, Inc. (NFLX)

If you have held Netflix securities since at least January 2022, you may be able to seek corporate reforms, the return of funds back to the company, and a court approved incentive award for you, all at absolutely no cost.

About Netflix

Netflix is a global streaming entertainment company incorporated in Delaware, with its registered office in Wilmington, Delaware.

The company delivers series, films, and games to subscribers, primarily generating revenue from monthly streaming memberships. In recent years, Netflix has expanded into advertising-supported plans and live programming.

What's being investigated

Lawyers are investigating whether Netflix’s board and officers may have failed to provide adequate oversight and disclosure regarding a significant tax dispute in Brazil. According to public reports, Netflix’s stock fell approximately 10% on October 22, 2025, following the release of its third-quarter earnings. The decline was reportedly driven by a one-time $619 million tax charge related to a Brazilian legal dispute, which affected the company’s profit margins despite otherwise strong growth.

Investors allege that Netflix’s handling of this tax matter, including the timing and characterization of the expense, related disclosures, and the adequacy of board-level controls, potentially raises questions about potential breaches of fiduciary duty, internal controls, and the accuracy of public statements.

Key timeline

• August 2025: Brazil Supreme Court issues a decision in an unrelated case, reportedly expanding the applicability of the “Contribution for Intervention and Economic Domain” (CIDE) tax. Investors allege this was a critical red flag for Netflix’s board and Audit Committee.
• October 21, 2025: Netflix releases third-quarter 2025 earnings, reporting a trailing-twelve-month revenue of $45.1 billion, quarterly revenue of $11.5 billion and a one-time $619 million tax charge related to the Brazil dispute. The company’s operating margin falls short of its 31.5% forecast.
• October 22, 2025: Netflix’s stock drops about 10% following the earnings release. Executives state the tax expense is a “cost of doing business in Brazil” and assert it will not have future material implications.

Why investors may be concerned

Attorneys are investigating whether Netflix’s board and officers may have failed to implement or maintain adequate systems to monitor and escalate mission-critical tax and legal risks regarding the Brazilian CIDE tax.

Investors allege that:

• The board and Audit Committee may not have responded to red flags after the August 2025 Brazilian court ruling.
• Disclosures about the tax exposure and the “one-time” nature of the expense may have been incomplete or misleading, especially if internal assessments showed a probable loss earlier than disclosed.

Your Rights and Next Steps

If you held Netflix stock during the relevant period, you may have the right to take action on behalf of the company through a shareholder action under Delaware law. This process allows investors to hold company officers and directors accountable for potential breaches of fiduciary duty and disclosure failures.

Shareholders may:

• Request corporate records through a Section 220 demand to investigate possible wrongdoing or board oversight failures.
• Pursue a shareholder lawsuit seeking financial recovery or governance reforms for Netflix if evidence supports the claims.
• Work with counsel to ensure compliance with Delaware’s continuous-ownership requirements and litigation deadlines.

To preserve your rights, you must have held shares continuously during the period in question and through any potential litigation. Investors are encouraged to act promptly, as deadlines may apply to participate or initiate a shareholder action.

How Shareholder Can Take Action

Securities investigations are time-sensitive. If you've held Netflix securities since at least January 2022, you may be able to seek corporate reforms, the return of funds back to the company, and a court approved incentive award for you, at no cost.

Please complete the form below to participate and help determine whether you qualify for potential compensation or other remedies.