British man arrested for hack-to-trade scheme involving email password resets

A Briton faces extradition to the US after hacking executives' Office 365 email accounts to obtain inside information for stock trades.

According to the US Department of Justice, London-based Robert Westbrook launched his hack-to-trade scheme in 2019 and ran for at least a year until 2020. He earned $3 from the information he collected, according to the US Securities and Exchange Commission .75 million US dollars (SEK). He was arrested in the United Kingdom.

According to court documents, Westbrook accessed the Office 365 email accounts of company executives to view future earnings releases and used that information to purchase stock, which he then resold for a profit after the companies' results were released.

The SEC said Westbrook targeted five publicly traded companies and accessed 14 earnings releases before they were publicly released in order to purchase securities based on the information.

The names of the companies were not disclosed, but one was based in Florida, another in Arkansas and three in California. Four are listed on the NYSE and one on the NASDAQ. Targets included chief financial officers, an assistant controller and a marketing director.

“Westbrook gained unauthorized access to the hacked companies' computer systems to obtain pre-release information about the companies' earnings – including earnings release drafts, press releases and scripts – and then used that information to trade in the hacked companies' securities in advance of public earnings releases.” , such a SEC filing.

“Prior to these public earnings announcements, Westbrook built large and risky options positions in the securities of the hacked companies and often sold these positions shortly after the public earnings announcements.”

How the hack worked

Westbrook is accused of targeting five executives using similar techniques, namely resetting their Microsoft Office 365 account by guessing their reset authentication questions to gain access to their email.

To help him answer these questions, Westbrook allegedly used a genealogy website he subscribed to via a VPN and Bitcoin to cover his tracks. Most of the companies attacked used the same password reset system; it was not named.

According to the Justice Department, Westbrook is accused in some cases of using automatic forwarding tools to send emails from the hacked email accounts to his own. In one case, he is said to have set emails so that they would be forwarded if they contained attachments or came from an accounting firm.

In one case, so a Court documentWestbrook is accused of accessing the Office 365 email of a company's finance director and using auto-forwarding to view quarterly results before they were released.

Two days before the results were announced – which included a decline in sales – Westbrook is accused of buying options that took advantage of that knowledge, netting $322,781 when sold two days later. In addition, Westbrook is accused of reading a CFO's emails for over a year and using the information obtained for trading purposes.

Despite the inside information, the court filing states that Westbrook actually made a loss after the earnings announcements on four of the 14 deals.

“The SEC is making ongoing efforts to protect markets and investors from the consequences of cyber fraud,” Jorge G. Tenreiro, acting head of the SEC’s Crypto Assets and Cyber Unit, said in a statement opinion.

“As this case demonstrates, the Commission's advanced data analytics, crypto asset tracing and technology can detect fraud even in complex cases, despite Westbrook taking several steps to conceal his identity – including the use of anonymous email accounts, VPN services and the use of Bitcoin.” international hacking.”

If extradited and found guilty, securities fraud in the US carries a maximum penalty of 20 years in prison and a $5 million fine, while Westbrook's hacking aspect carries an additional 20 years in prison and a fine of either $250,000. dollars or twice the profit or loss from the crime, whichever is greater.

Individual cases of computer fraud also face up to five years in prison. Westbrook also faces a civil lawsuit from the SEC.

British man arrested for hack-to-trade scheme involving email password resets

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British man arrested for hack-to-trade scheme involving email password resets

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