UK man charged in $3.75m insider trading hack-to-trade scheme
London resident faces extradition to the US
The US Department of Justice (DoJ) has announced the arrest of Robert Westbrook, a 39-year-old UK citizen, accused of orchestrating a cyber-enabled insider trading scheme that yielded approximately $3.75 million in illegal profits.
Westbrook, a London resident, was apprehended last week and now faces extradition to the United States, where he is charged with securities fraud, wire fraud and multiple counts of computer fraud.
Westbrook allegedly engaged in the scheme between January 2019 and May 2020. He is said to have infiltrated Microsoft 365 email accounts of corporate executives at US-based companies, gaining unauthorised access to sensitive, non-public information, including data about upcoming earnings reports. Armed with this confidential information, Westbrook allegedly traded securities, generating significant profits by acting on the details before they were publicly released.
The DoJ stated that Westbrook accessed the email accounts on at least five separate occasions, even setting up auto-forwarding rules to divert email traffic from the compromised accounts to addresses under his control. This method ensured a continuous flow of confidential corporate information.
The US Securities and Exchange Commission (SEC) said that Westbrook manipulated the accounts of executives from five publicly traded companies to profit from at least 14 earnings announcements. Despite his efforts to mask his identity through anonymous email accounts, VPNs and cryptocurrency transactions, the SEC used analytics and crypto tracing technologies to expose the fraud.
Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit, said: “Even though Westbrook took multiple steps to conceal his identity – including using anonymous email accounts, VPN services, and utilising bitcoin – the Commission's advanced data analytics, crypto asset tracing and technology can uncover fraud even in cases involving sophisticated international hacking.”
Westbrook faces severe penalties if convicted. Securities fraud carries a maximum prison sentence of 20 years and a fine of up to $5 million. Each wire fraud charge could result in up to 20 years behind bars and fines ranging from $250,000 to double the gain or loss incurred by the offense. Additionally, each computer fraud charge could bring a five-year prison term and similar financial penalties.