In a high-profile case that combines cybercrime and securities fraud, Robert Westbrook, a 39-year-old United Kingdom national, has been charged for allegedly masterminding a hack-to-trade scheme that generated millions of dollars in illegal profits. The U.S. Attorney’s Office for the District of New Jersey announced this week that Westbrook was arrested in London and is awaiting extradition to the United States. He faces charges of securities fraud, wire fraud, and computer fraud.
This case marks a significant development in white-collar crime, where hackers exploit non-public information to trade on the stock market illegally. With over $3 million in alleged profits, Robert Westbrook’s actions highlight a growing risk in the digital financial landscape, further complicating efforts to maintain market integrity.
The Alleged Hack-to-Trade Scheme by Robert Westbrook
According to court documents and statements made in court, Robert Westbrook is accused of carrying out a sophisticated hacking scheme between January 2019 and May 2020. The scheme involved breaching corporate email accounts of executives from U.S.-based companies, specifically those who had access to sensitive financial data, such as earnings reports and other non-public information.
Westbrook allegedly hacked into these executives’ Office365 email accounts to gain unauthorized access to insider information. Using this knowledge, he made strategic trades in securities, buying and selling stocks based on confidential earnings announcements before the information became public. This enabled Robert Westbrook to profit significantly, as stock prices would rise or fall based on the news he already knew.
In addition, Westbrook is accused of using auto-forwarding rules on the compromised email accounts to ensure that he continually received insider information without the need to re-hack the accounts. This allowed him to monitor ongoing communications and financial data in real-time, maintaining an unfair advantage in the stock market.
Through this scheme, Robert Westbrook allegedly generated profits exceeding $3 million, violating U.S. securities laws designed to ensure fair trading.
Legal Consequences for Robert Westbrook
The charges against Robert Westbrook are serious, with potentially severe penalties. He faces charges of securities fraud, wire fraud, and five counts of computer fraud, all of which carry significant prison sentences and hefty fines.
- Securities fraud: This charge relates to Westbrook’s alleged use of insider information to manipulate stock prices. If convicted, he could face up to 20 years in prison and a fine of $5 million.
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- Wire fraud: Westbrook is also charged with wire fraud for using telecommunications to commit the fraud. This charge carries a maximum sentence of 20 years in prison and a fine of $250,000 or double the financial gain from the offense.
- Computer fraud: With five counts of computer fraud related to his unauthorized access to corporate email systems, Westbrook faces additional penalties, with each count carrying up to 5 years in prison and significant fines.
In parallel to the criminal charges, the U.S. Securities and Exchange Commission (SEC) has filed a civil complaint against Robert Westbrook for his involvement in the fraud. The SEC is seeking financial penalties, including the recovery of ill-gotten profits and civil fines.
Extradition and Ongoing Investigations
Following his arrest in the U.K., Robert Westbrook is currently awaiting extradition to the U.S., where he will stand trial in New Jersey federal court. U.S. Attorney Philip R. Sellinger praised the collaborative efforts of law enforcement agencies, particularly the FBI’s Newark Field Office, for their role in uncovering and investigating the alleged scheme. Special Agent in Charge Nelson I. Delgado credited his team’s cybercrime unit with playing a crucial role in tracking Westbrook’s activities.
The Rise of Hack-to-Trade Schemes
The case involving Robert Westbrook sheds light on the emerging threat posed by hack-to-trade schemes, which exploit corporate cybersecurity vulnerabilities to gain an illegal trading advantage. This form of cybercrime not only harms individual companies but also undermines confidence in the stock market as a whole. By breaching corporate emails and using insider information to manipulate trades, hackers like Robert Westbrook can generate millions in profits, all while eroding market fairness.
With the financial sector increasingly reliant on digital communication systems like Office365, the potential for cybercrime has grown exponentially. The Robert Westbrook case serves as a stark reminder to corporations and regulators alike that stronger cybersecurity measures are essential to protect market integrity.
If convicted, Robert Westbrook could face decades in prison and financial penalties that exceed his fraudulent gains. However, as in all criminal cases, he remains innocent until proven guilty in court.
