The SEC has charged a UK citizen with hacking into the systems of five US public companies to obtain sensitive information.
Robert B. Westbrook allegedly used this data to make $3.75 million in illegal profits by trading ahead of corporate earnings announcements.
The Details of the Case
The SEC’s complaint was filed on September 27, 2024, in the U.S. District Court for the District of New Jersey.
It alleges Westbrook conducted his hacking operation between January 2019 and August 2020.
He allegedly accessed corporate systems by resetting the passwords of senior executives. This enabled him to retrieve nonpublic earnings data.
It is claimed he then used this information to make illegal trades before the release of at least 14 earnings announcements.
SEC’s Response to Cyber Fraud
Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, said:
“Even though Westbrook used various methods to hide his identity—such as anonymous emails, VPNs, and bitcoin transactions—the SEC’s advanced tools, including data analytics and crypto tracing, were able to detect this fraud.”
Legal Consequences for Westbrook
The SEC’s complaint accuses Westbrook of violating the antifraud provisions of the Securities Exchange Act of 1934. It seeks civil penalties, repayment of his illicit profits with interest, and an injunction to prevent future violations. In addition, the U.S. Attorney’s Office for the District of New Jersey has announced related criminal charges against Westbrook.
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Ongoing Investigations and Support
The SEC’s investigation is ongoing, led by a team from its New York Regional Office and Market Abuse Unit, along with experts from the Crypto Assets and Cyber Unit. The case is supervised by high-level officials, including Mark R. Sylvester and Joseph Sansone, and litigation will be handled by Rusty Feldman and Karolina Klyuchnikova.
The SEC has received assistance from the Financial Industry Regulatory Authority (FINRA) and the U.K.’s Financial Conduct Authority (FCA) in this case.
Uncovering Sophisticated Cybercrime
This case demonstrates the SEC’s ability to track down sophisticated cybercriminals, even when they attempt to conceal their identities. The use of cutting-edge technology and cross-border cooperation was crucial in identifying Westbrook’s actions, ensuring that those involved in cyber fraud face serious consequences.
The ongoing case against Westbrook highlights the importance of cybersecurity in protecting financial markets and the critical role the SEC plays in safeguarding investor confidence.
