The Securities and Exchange Commission (SEC) announced charges against Robert B. Westbrook, a U.K. citizen, for allegedly hacking into the computer systems of five U.S. public companies.
The SEC claims that Westbrook used this unauthorized access to obtain material nonpublic information about the companies’ earnings, resulting in approximately $3.75 million in illicit profits.
Details of the Allegations
According to the SEC’s complaint, filed on September 27, 2024, in the U.S. District Court for the District of New Jersey, Westbrook’s hacking activities spanned from January 2019 to August 2020.
He reportedly gained access to the companies’ systems by resetting passwords of senior executives’ accounts. This breach allowed him to trade securities based on insider information before at least 14 public earnings announcements.
The SEC has charged Westbrook with violating the antifraud provisions of the Securities Exchange Act of 1934. The complaint seeks civil penalties, the return of ill-gotten gains with interest, and an injunction against future violations of federal securities laws.
SEC’s Advanced Investigative Techniques
Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, emphasized the agency’s commitment to combating cyber fraud.
“As this case demonstrates, even though Westbrook took multiple steps to conceal his identity – including using anonymous email accounts, VPN services, and utilizing bitcoin – the Commission’s advanced data analytics, crypto asset tracing, and technology can uncover fraud even in cases involving sophisticated international hacking,” Tenreiro stated.
The investigation involved a coordinated effort by various SEC units and staff members, employing cutting-edge forensic techniques to trace Westbrook’s activities despite his attempts at anonymity.
Parallel Criminal Charges
In conjunction with the SEC’s civil charges, the U.S. Attorney’s Office for the District of New Jersey has announced criminal charges against Westbrook.
This parallel action underscores the seriousness of the allegations and highlights ongoing efforts by U.S. authorities to address international cybercrime.
The investigation is being conducted by a team from the SEC’s New York Regional Office and Market Abuse Unit, with substantial assistance from IT Forensics staff and economic analysts.
The SEC also acknowledged support from the Financial Industry Regulatory Authority and the United Kingdom Financial Conduct Authority.