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The U.S. Securities and Exchange Commission (SEC) has filed charges against Robert B. Westbrook, a UK citizen, for allegedly hacking into the computer systems of five U.S. public companies to obtain confidential earnings information. The SEC claims Westbrook used this information to make approximately $3.75 million in profits by trading ahead of public earnings announcements.
According to the complaint filed on September 27, 2024, in the U.S. District Court for the District of New Jersey, Westbrook allegedly accessed the companies' systems between January 2019 and August 2020 by resetting passwords of senior executives' accounts and obtaining material nonpublic information that he used to trade in the securities of the five public companies prior to the release of at least 14 earnings announcements.
Jorge G. Tenreiro, Acting Chief of the SEC's Crypto Assets and Cyber Unit, stated that, "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.”
The SEC has charged Westbrook with violating antifraud provisions of the Securities Exchange Act of 1934. The complaint seeks civil penalties, disgorgement of ill-gotten gains with prejudgment interest, and an injunction against future violations.
Parallel criminal charges have been filed by the U.S. Attorney's Office for the District of New Jersey.
The SEC's investigation, which is ongoing, involves staff from various units including the New York Regional Office, the Market Abuse Unit, and the Crypto Assets and Cyber Unit. The case is being supervised by Mark R. Sylvester and Jorge G. Tenreiro of the Crypto Assets and Cyber Unit and Joseph Sansone of the Market Abuse Unit.
The SEC acknowledged assistance from the Financial Industry Regulatory Authority and the United Kingdom Financial Conduct Authority in this case.
It was not stated whether Westbrook was operating in a private capacity or on behalf of an investment firm.
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