SEC v. Robert B. Westbrook, No. 2:24-cv-9497, District of New Jersey (Sept. 27, 2024) — Complaint

Joseph G. Sansone
Jorge G. Tenreiro
Alison R. Levine
Russell J. Feldman
Karolina Klyuchnikova
U.S. Securities and Exchange Commission
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-9144 (Feldman)
[email protected]

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

ROBERT B. WESTBROOK,

                                             Defendant.

Civil Action No.

Complaint for Violations
of the Federal Securities
Laws

Jury Trial Demanded

Plaintiff Securities and Exchange Commission (“Commission”), located at
100 Pearl Street, Suite 20-100, New York, New York 10004-2616, alleges as
follows against Robert B. Westbrook (“Westbrook” or the “Defendant”), whose
last known address is 5B Radnor Walk, Chelsea, London SW3 4BP, United
Kingdom:

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SUMMARY
1. This is a “hack-to-trade” case. Specifically, this case involves a
fraudulent scheme by Westbrook to hack into the computer systems of U.S. public
companies to deceptively obtain material nonpublic information about their
corporate earnings and to use that information to profit by trading in advance of the
companies’ public earnings announcements.
2. Between approximately January 2019 and August 2020 (the “Relevant
Period”), Westbrook directly or indirectly made material misstatements and used
deceptive means to access the computer systems of at least five companies with
shares of stock publicly traded on U.S. securities exchanges (each a “Hacked
Company” and collectively the “Hacked Companies”).
1
 This included that
Westbrook: used the credentials of the Hacked Companies’ employees without
authorization (e.g., usernames and passwords that did not belong to Westbrook);
made affirmative misrepresentations that he was one of those employees or other
legitimate user of the Hacked Companies’ computer systems; and used tools and
techniques to conceal his identity and location while conducting the hacking.
3. Westbrook gained unauthorized access into the Hacked Companies’
computer systems to obtain pre-release corporate earnings information—including

1
 As explained further below, the “Hacked Companies” are identified herein as
“Company-1,” “Company-2,” “Company-3,” “Company-4,” and “Company-5.”

3

draft earnings releases, press releases, and scripts—and then used that information
to trade in the securities of the Hacked Companies in advance of their public
earnings announcements. Prior to these public earnings announcements,
Westbrook established large and risky options positions in the Hacked Companies’
securities, and often sold out of those positions shortly after the public earnings
announcements.
4. In deceptively obtaining nonpublic earnings information from the
Hacked Companies and trading in their securities in advance of at least 14 earnings
announcements, Westbrook reaped approximately $3.75 million in illicit profits.
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5. By engaging in this conduct, Westbrook violated Section 10(b) of the
Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
6. The Commission brings this action pursuant to the authority conferred
upon it by Sections 21 and 21A of the Exchange Act [15 U.S.C. §§ 78u, 78u-1].
7. The Commission seeks a final judgment: (a) permanently enjoining
Westbrook from violating the federal securities laws and rules this Complaint

2
 Westbrook’s trades in advance of four of the 14 earnings announcements were
unprofitable, even though he traded based on material nonpublic information.
These unprofitable trades were excluded from the calculation of Westbrook’s illicit
profits.

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alleges he has violated; (b) ordering Westbrook to disgorge all ill-gotten gains he
received as a result of the violations alleged herein and to pay prejudgment interest
thereon, pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act
[15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and (c) ordering Westbrook to
pay a civil money penalty pursuant to Sections 21A(a) or 21(d) of the Exchange
Act [15 U.S.C. §§ 78u-1, 78u(d)(3)]. The Commission seeks any other relief the
Court may deem appropriate pursuant to Section 21(d)(5) of the Exchange Act [15
U.S.C. § 78u(d)(5)].
JURISDICTION AND VENUE
8. This Court has jurisdiction over this action pursuant to Sections 21(d),
21(e), 21A and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 77u(e), 78u-1, and
78aa]. Westbrook, directly or indirectly, made use of the means or
instrumentalities of interstate commerce, or of the mails, or the facilities of a
national securities exchange in connection with the transactions, acts, practices,
and courses of business alleged in this Complaint. Westbrook deceptively obtained
material nonpublic information from U.S. public companies and used the
information to make securities trades that were cleared through U.S.-based
brokerage firms and placed on multiple national securities exchanges, in a manner
that used the instrumentalities of interstate commerce.
9. Venue lies in this District under Section 27 of the Exchange Act [15

5

U.S.C. § 78aa]. Certain of the purchases and sales of securities and acts, practices,
transactions, and courses of business constituting violations alleged in this
Complaint occurred within this District, and were effected, directly or indirectly,
by making use of the means, instruments, or instrumentalities of transportation or
communication in interstate commerce, or of the mails, or the facilities of national
securities exchanges. Specifically, many of the illegal securities transactions were
conducted using various national securities exchanges, such as the Nasdaq Global
Market Select (“Nasdaq”) and the New York Stock Exchange (“NYSE”), including
one or more transactions that was processed using data servers located in New
Jersey. Furthermore, under 28 U.S.C. § 1391(c)(3), venue lies in this District
because Westbrook, as a foreign national residing outside the United States, may
be sued in any judicial district.
DEFENDANT
10. Robert B. Westbrook, age 38, is a citizen and resident of the United
Kingdom. Westbrook holds himself out as having studied economics at the
University of Oxford, and he worked in several positions in the financial industry
in London. During the Relevant Period, Westbrook held several brokerage
accounts with firms based in the United States and held several brokerage accounts
with firms in the United Kingdom.

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TERMS USED IN THIS COMPLAINT
11. A stock option, commonly referred to as an “option,” gives its
purchaser-holder the right to buy or sell shares of an underlying stock at a specified
price (the “strike” price) prior to the expiration date. Options are generally sold in
“contracts,” which give the option holder the opportunity to buy or sell 100 shares
of the underlying stock.
12. A “call” option gives the purchaser-holder of the option the right, but
not the obligation, to purchase a specified amount of an underlying security at a
specified strike price within a specific time period. Generally, the buyer of a call
option anticipates that the price of the underlying security will increase during a
specified amount of time, allowing the buyer of the call option to make a profit
from the difference between the higher market price of the underlying security and
the strike price (less the cost of the option).
13. A “put” option gives the holder of the option the right, but not the
obligation, to sell a specified amount of an underlying security at a specified strike
price within a specific time period. Generally, the buyer of a put option anticipates
that the price of the underlying security will decrease during a specified amount of
time, allowing the buyer of the put option to make a profit from the difference
between the strike price (less the cost of the option) and the lower market price of
the underlying security.

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14. An out-of-the-money call option refers to an option that would expire
worthless unless the price of the underlying stock rose by a certain amount before
expiration. Specifically, in the case of a call option, out-of-the-money refers to a
scenario where the strike price is higher than the market price of the stock that
underlies the call option.
15. An out-of-the-money put option refers to an option that would expire
worthless unless the price of the underlying stock fell by a certain amount before
expiration. Specifically, in the case of a put option, out-of-the-money refers to a
scenario where the strike price is lower than the market price of the stock that
underlies the put option.
16. Generally, the higher the strike price is above the stock price, the
more inexpensive the call option will be to purchase. This is because it would take
an upward move in the price of the underlying stock that is large enough to surpass
the option’s strike price for the call option to become in-the-money and become
more valuable—and thus avoid expiring worthless. As a result, the higher the
strike price of a call option is above the stock price, the greater the risk the call
option will expire worthless.
17. Similarly, the nearer an out-of-the-money call option is to its
expiration date, the greater the risk the call option will expire worthless. This
results from the fact that there is simply less time for the price of the underlying

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stock to rise enough to make the call option more valuable and avoid expiring
worthless.
18. Likewise, the lower the strike price of a put option is below the stock
price, the more inexpensive the put option will be to purchase. This is because it
would take a downward move in the price of the underlying stock that is large
enough to fall below the option’s strike price for the put option to become in-the-
money and become more valuable and thus avoid expiring worthless. As a result,
the lower the strike price is below the stock price, the greater the risk the put option
will expire worthless.
19. Similarly, the nearer an out-of-the-money put option is to its
expiration date, the greater the risk the put option will expire worthless. This
results from the fact that there is simply less time for the price of the underlying
stock to fall enough to make the put option more valuable and avoid expiring
worthless.
20. An “internet protocol address” or “IP address” is a unique number
required for online activity conducted by a computer or other device connected to
the internet. Computers use the unique identifier to send data to specific computers
on a network. Often, IP addresses can be used to identify the geographic location
of the server through which a computer accessed the internet. Thus, an IP address
is like a return address on a letter. Additionally, an individual can conceal the IP

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address from which he or she is accessing the internet through a number of
different techniques and tools.
21. A “virtual private network” or “VPN” is one such tool that an
individual can use to conceal his or her IP address. A VPN enables an individual to
assume and use IP addresses different from his or her own, including IP addresses
associated with different geographical regions.
FACTS
I. Overview of the Hack-to-Trade Scheme
22. During the Relevant Period, Westbrook engaged in an unlawful
scheme in which he directly or indirectly used deceptive means to access the
computer systems of at least five publicly-traded U.S. companies and then used
that information to trade in advance of their earnings announcements.
23. Each of the Hacked Companies is a company that has shares of stock
that are registered under Section 12(b) of the Exchange Act and that are publicly
traded on a U.S. national securities exchange. In connection with their reporting
obligations under the securities laws, the Hacked Companies prepared periodic and
other reports to be filed with the Commission and disseminated to the investing
public, including materials relating to the Hacked Companies’ earnings. This
included, among other things, drafts of earnings releases, press releases, and scripts
for earnings announcements and related internal emails.

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24. The information contained in these documents and emails was
nonpublic because it had not yet been published or filed in a manner designed to
achieve a broad dissemination to the investing public generally and without
favoring any person or group.
25. The information contained in these documents and emails was also
material. The Hacked Companies’ information would have been important to the
reasonable investor and viewed by the reasonable investor as having significantly
altered the total mix of information made available. Information about a
company’s earnings is material because it relates to, among other things, a public
company’s financial condition, solvency, and profitability. For example, public
disclosure of earnings information frequently leads to a change in the price of a
company’s stock. It is common for financial analysts to estimate and/or model a
given company’s quarterly or annual earnings. The market reaches a consensus
expectation based in part on these different estimates. When a company releases its
earnings announcements, the price at which shares of that company’s stock trade
often increases (if earnings exceed market expectations) or decreases (if earnings
fall short of market expectations).
26. Westbrook knowingly, or with reckless disregard, made material
misrepresentations, affirmatively misrepresented his identity, and employed a
variety of deceptive and fraudulent devices, contrivances, artifices, practices,

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means, and acts to access the computer systems of the five Hacked Companies.
Specifically, Westbrook used, among other things: deceptively-obtained
credentials of the Hacked Companies’ employees; VPN services to conceal the IP
address from which he accessed the internet; and anonymous email accounts to
conceal his identity.
27. The hacking incidents each followed a similar pattern, with some
limited exceptions, and occurred before the Hacked Companies were set to
publicly announce earnings.
a. First, Westbrook reset a senior executive’s computer system
password at each of the Hacked Companies. Four of the five
Hacked Companies used the same password reset portal
software.
b. Second, Westbrook used the senior executive’s username and
reset password to access the Hacked Company’s computer
system, including the senior executive’s Microsoft Office 365
(“Office 365”) account and Microsoft Outlook email account
(“Outlook”). In each hacking incident, the senior executive’s
Outlook contained emails with material nonpublic information
about the Hacked Company’s upcoming earnings
announcement.

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c. Third, Westbrook set up (or attempted to set up) email auto-
forwarding rules in the senior executive’s Outlook. Those rules
were designed to forward emails containing nonpublic
information about the Hacked Company’s earnings from the
senior executive’s Outlook to one of several anonymous email
accounts that Westbrook accessed.
d. Fourth, in advance of the Hacked Company’s public earnings
announcement, Westbrook purchased stock and/or options in
the Hacked Company based on the nonpublic earnings
information that he deceptively obtained.
e. And finally, Westbrook typically liquidated his securities
positions in the Hacked Company shortly after its public
earnings announcement and reaped significant profits.
28. Westbrook placed securities trades in the Hacked Companies on
national securities exchanges through U.S.-based broker dealers, in a manner that
utilized instrumentalities of interstate commerce.
29. By repeatedly engaging in this course of conduct—deceptively
obtaining information from the Hacked Companies that he knew or recklessly
disregarded was material and nonpublic and then trading in their securities in
advance of their earnings announcements—Westbrook reaped approximately $3.75

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million in illicit profits.
II. Examples of the Hack-to-Trade Scheme
30. Below are several examples where Westbrook deceptively obtained
material nonpublic information from the Hacked Companies and traded profitably
in the securities of the Hacked Companies based on that information.
A. Hack of Company-1
31. During the Relevant Period, Company-1 was a Delaware corporation
headquartered in Orlando, Florida. It had a class of shares registered under Section
12(b) of the Exchange Act and its common stock traded on the NYSE.
32. On January 26, 2019, Westbrook hacked into Company-1’s computer
system by misrepresenting his identity and deceptively using the credentials of an
employee of Company-1.
33. Specifically, Westbrook reset the password of a senior finance
executive of Company-1 (“Executive-1”) through Company-1’s password reset
portal. After he reset the password, Westbrook accessed Company-1’s computer
system, including Executive-1’s Outlook.
34. While inside Company-1’s computer system, Westbrook gained
access to documents and emails containing material nonpublic information about
Company-1’s earnings for the fourth quarter of its fiscal year 2018. These emails
included one that Executive-1 received on January 22, 2019, which contained a

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draft press release about the company’s fourth quarter financial results. The draft
press release stated, among other things, that Company-1’s net sales were down
14% and that its dividend would be $0.27 per share. The draft press release also
forecast its fiscal year 2019 earnings per share in the range of $4.06 to $4.21. This
was negative news because, by comparison, Company-1 paid a dividend of $0.68
per share in the prior quarter, and the consensus expectations of securities market
analysts predicted earnings per share for the same period of $4.45.
35. While inside Executive-1’s Outlook, Westbrook also created auto-
forwarding rules designed to send all emails that Executive-1 received containing
attachments to Aleksandrdubois1[@]gmail.com (“Aleksandrdubois”)—an
anonymous email account that Westbrook accessed. The auto-forwarding rules
were likely unsuccessful, however, because Company-1’s computer systems had
been configured to prevent email auto-forwarding for all users.
36. Westbrook purchased Company-1’s securities based on information
he deceptively obtained and knew or recklessly disregarded was material and
nonpublic regarding Company-1’s financial results.
37. Starting on January 28, 2019 at approximately 3:20 pm EST—less
than two days before Company-1 publicly announced its financial results for the
fourth quarter of its fiscal year 2018—and continuing the next day, Westbrook
purchased a total of 670 Company-1 put options across five different option series.

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Specifically, Westbrook purchased the following Company-1 put options at a total
cost of $129,429:
Put Options Purchased Expiration Date Strike Price
50 2/15/19 $30
110 2/15/19 $35
200 2/15/19 $40
230 3/15/19 $35
80 3/15/19 $40

38. The next day, on January 29, 2019, Westbrook sent an email to
another individual stating, “Wanted to flag my idea on [Company-1], which I have
reasonable conviction on (as reflected in the sizing relative to the portfolio) . . . this
is my favorite idea – my view is there is significant guidance risk here.”
39. On January 30, 2019, at approximately 7am EST, Company-1
reported its financial results for the fourth quarter of its fiscal year 2018 and
announced the dividend it would be paying to shareholders. Those results reflected
material information about Company-1’s earnings that was included in the draft
press release that Westbrook gained access to when he hacked into Company-1’s
computer system several days earlier, including that Company-1’s net sales were
down 14%, that its dividend would be 27 cents per share, and that the forecast for
its fiscal year 2019 earnings per share was in the range of $4.06 to $4.21.
40. By the close of regular market trading that day, Company-1’s stock
price declined 27%—from a closing price of $38.13 on January 29, 2019 to a
closing price of $27.67 on January 30, 2019.

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41. On January 30, 2019, the same day that Company-1 reported its
financial results, Westbrook sold his entire position of  Company-1 put options for
proceeds of $452,210. As a result of his trading in Company-1 securities in
connection with this earnings announcement, Westbrook obtained a total profit of
approximately $322,781.
42. The options positions Westbrook established in Company-1 prior to
this earnings announcement were large and risky. Westbrook’s purchases of
Company-1 put options on January 28, 2019 accounted for approximately 16% of
all Company-1 put options traded that day.
3
 Similarly, Westbrook’s purchases of
Company-1 put options on January 29, 2019 accounted for approximately 32% of
all Company-1 put options traded that day. In fact, going into Company-1’s
earnings announcement on January 30, 2019, Westbrook was the only retail holder
of more than 200 Company-1 put options.
B. Hack of Company-2
43. During the Relevant Period, Company-2 was a Massachusetts
corporation headquartered in Los Angeles, California. It had a class of shares
registered under Section 12(b) of the Exchange Act and its common stock traded
on the NYSE.

3
 Westbrook’s purchases of Company-1 put options also accounted for
approximately 78% of all Company-1 put options expiring in February 2019 that
traded in the market on January 28, 2019.

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44. On or about February 15, 2019, Westbrook hacked into Company-2’s
computer system. Company-2 used the same password reset portal software as
Company-1, Company-4, and Company-5.
45. Specifically, Westbrook gained access to and set up an auto-
forwarding rule in the Outlook email account of a senior accounting executive of
Company-2 (“Executive-2”). That auto-forwarding rule was designed to send
emails that Executive-2 received from any of four specified Company-2 employees
to Harris.Slama402[@]aol.com (“Harris.Slama”)—an anonymous email account
that Westbrook accessed. That auto-forwarding rule began on or about February
15, 2019 and continued until at least January 2021.
46. As a result of the email auto-forwarding rule, Westbrook accessed
emails containing material nonpublic information about Company-2’s unreported
financial results. For instance, emails auto-forwarded from Executive-2’s Outlook
to Harris.Slama between approximately April 30, 2020 and May 6, 2020 contained
nonpublic information about Company-2’s financial results for the first quarter of
its fiscal year 2020. This forwarded information included an April 30, 2020 draft
earnings call script, which stated, among other things, “Our first-quarter results
were outstanding and well ahead of expectations”; the company “delivered double-
digit revenue growth across all our segments”; “[r]evenue for the first quarter was
$1.3 billion, up 30%”; and net income for “the first quarter of 2020 was $17.4

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million, or $0.34 per diluted share.” The forwarded information also included a
May 1, 2020 draft Form 10-Q for the first quarter of its fiscal year 2020, which
similarly reflected a revenue for the quarter of approximately $1.3 billion and
diluted earnings per share of $0.34.
47. Westbrook purchased Company-2’s securities based on information
he deceptively obtained and knew or recklessly disregarded was material and
nonpublic regarding Company-2’s financial results.
48. Starting on May 4, 2020—two days before Company-2 was scheduled
to announce its financial results—Westbrook purchased Company-2 stock and
3,706 Company-2 call options across eight different option series for a total cost of
approximately $789,743. Specifically, Westbrook purchased 40,000 shares of
Company-2 stock at a cost of $256,951, and the following Company-2 call options
at a total cost of $532,792:
Call Options Purchased Expiration Date Strike Price
360 5/15/20 $5.00
818 5/15/20 $7.50
300 6/19/20 $5.00
1000 6/19/20 $7.50
200 10/16/20 $5.00
812 10/16/20 $7.50
200 12/18/20 $5.00
16 12/18/20 $7.50

49. On May 6, 2020, after the stock market closed, Company-2
announced its financial results for the first quarter of its fiscal year 2020. Those

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results reflected material information about Company-2’s earnings that was
included in the draft earnings call script and draft Form 10-Q that Westbrook
gained access to as a result of the email auto-forwarding rules he created in
February 2019—such as revenue of $1.3 billion and diluted earnings per share of
$0.34.
50. Company-2’s earnings announcement reported higher revenue of $1.3
billion compared to consensus expectations of securities market analysts of $1.03
billion, and a higher diluted earnings per share number of $0.34 compared to
consensus expectations of $0.06.
51. By the close of regular market trading the next day, Company-2’s
stock price had increased by approximately 30%—from a closing price of $6.19 on
May 6, 2020 to a closing price of $8.03 on May 7, 2020.
52. On May 7, 2020, the day after Company-2 announced its financial
results, Westbrook sold half of his Company-2 stock and approximately 40% of his
Company-2 call options, obtaining a realized profit of approximately $101,343. As
of the close of trading that day, Westbrook’s remaining position in Company-2
securities had generated unrealized profits of approximately $209,141, for a total
realized and unrealized gain of approximately $310,485.
53. The options positions Westbrook established in Company-2 prior to
this earnings announcement were large and risky. Westbrook’s purchases of

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Company-2 call options between May 4, 2020 and May 6, 2020 accounted for
approximately 70% of all Company-2 call options purchased between those dates.
In fact, going into Company-2’s earnings announcement on May 7, 2020,
Westbrook owned more Company-2 call options than any other market participant.
Westbrook’s call options position was more than six times the size of the call
options position of the next largest holder.
54. Notably, Westbrook traded in advance of Company-2’s earnings
announcements from on or about the time that Executive-2’s emails were auto-
forwarded to the Harris.Slama account in February 2019 until May 2020—a period
when Westbrook was aware of material nonpublic information about Company-2’s
financial results.
55. All told, Westbrook obtained total profits of approximately $391,475
from his trading in Company-2 securities between May 2019 and May 2020.
C. Hack of Company-3
56. During the Relevant Period, Company-3 was a Delaware corporation
headquartered in San Mateo, California. It had a class of shares registered under
Section 12(b) of the Exchange Act and its common stock traded on the NYSE.
57. On February 21, 2019, Company-3 issued a press release stating that
it would announce its financial results for the second quarter of its fiscal year 2019
on March 6, 2019 after market close.

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58. The next day, on February 22, 2019, Westbrook hacked into
Company-3’s computer system by misrepresenting his identity and deceptively
using the credentials of an employee of Company-3.
59. Specifically, Westbrook reset the computer system password of a
senior finance executive of Company-3 (“Executive-3”). After he reset the
password, Westbrook accessed Company-3’s computer system, including
Executive-3’s Office 365 account and Outlook.
60. While inside Executive-3’s Outlook, Westbrook created four auto-
forwarding rules designed to send certain emails from Executive-3 to
barnesbainesbjorn[@]gmail.com (“Barnesbainesbjorn”)—an anonymous email
account Westbrook accessed. In particular, the auto-forwarding rules were
designed to forward, among others, emails containing attachments and Company-
3’s stock ticker in the email subject or body, as well as emails containing “script”
in the email subject or body. Those auto-forwarding rules began to forward emails
that same day and continued until approximately March 2021.
61. While inside Executive-3’s Outlook, Westbrook gained access to
documents and emails containing material nonpublic information about Company-
3’s financial results for the second quarter of its fiscal year 2019. This included a
draft script of an earnings call that Executive-3 had received on February 19, 2019.
That draft script stated, in part, that Company-3’s “[t]otal revenue in the quarter of

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$168.6 million was above the high-end of our guidance range” and that the quarter
was “characterized by strong business momentum.” Because of the email auto-
forwarding rules that Westbrook created above, subsequent drafts of this earnings
call script were also sent to the Barnesbainesbjorn account. This included a
February 23, 2019 draft script, which stated that Company-3’s “financial results
exceeded our revenue and profitability guidance ranges, with total revenue of
$169.3 million[.]”
62. Westbrook purchased Company-3’s securities based on information
he deceptively obtained and knew or recklessly disregarded was material and
nonpublic regarding Company-3’s financial results.
63. Starting on March 6, 2019 at 10:05am EST—the day that Company-3
was scheduled to announce its financial results—Westbrook bought 5,000 shares
of Company-3 stock and 285 Company-3 call options across four different option
series for a total cost of approximately $494,325. Specifically, Westbrook
purchased 5,000 shares of Company-3 stock at a cost of $433,275, and the
following Company-3 call options at a total cost of $61,050:
Call Options Purchased Expiration Date Strike Price
20 3/15/19 $85
190 3/15/19 $90
25 4/18/19 $85
50 4/18/19 $90

64. On March 6, 2019, after the stock market closed, Company-3

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announced its financial results for the second quarter of its fiscal year 2019. Those
results reflected material information about Company-3’s earnings that was
included in the draft earnings call script that Westbrook gained access to when he
hacked into Company-3’s computer system—such as total revenue for the second
quarter of $169.3 million.
65. Company-3’s earnings announcement exceeded the consensus
expectations of securities market analysts, who had predicted that the company’s
total revenue for the quarter would be $159.71 million, as well as the company’s
previously issued guidance ranges.
66. By the close of regular market trading the next day, Company-3’s
stock price had increased 4.3%—from a closing price of $86.46 on March 6, 2019
to a closing price of $90.22 on March 7, 2019.
67. On March 7, 2019, shortly after the stock market opened, Westbrook
sold all of his stock and call options in Company-3. As a result of his trading in
Company-3’s securities in connection with this earnings announcement,
Westbrook obtained a total profit of approximately $236,492.
68. The options positions Westbrook established in Company-3 prior to
this earnings announcement were large and risky. Westbrook’s purchases of
Company-3 call options on March 6, 2019 accounted for approximately 11% of all
Company-3 call options traded that day. In fact, going into Company-3’s earnings

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announcement that day, Westbrook was, by far, the single largest retail holder of
Company-3 call options.
69. Notably, Westbrook continued trading in advance of Company-3’s
earnings announcements during the period of time when Executive-3’s emails
continued to be auto-forwarded to the Barnesbainesbjorn account—from
approximately March 2019 to approximately March 2020.
70. In one example, Westbrook bought $786,364 worth of Company-3 put
options in advance of the company’s second quarter earnings announcement that
took place on March 4, 2020. He did so based on material nonpublic information
about Company-3’s financial results for the second quarter of its fiscal year 2020
that Westbrook gained access to because of the email auto-forwarding rule. This
included a draft revenue forecast that reported second quarter revenue that was
somewhat higher than analysts’ consensus estimates ($174 million vs. $166.39
million), but also included forecasted revenue for its fiscal year 2020 that was
significantly lower than analysts’ consensus estimates ($724.7 million vs. $766.09
million). The earnings announcement reflected mixed news, where Company-3
beat certain quarterly expectations but significantly lowered its previous revenue
guidance. By the close of business the next day, Company-3’s stock price declined
approximately 17%. Starting on March 5, 2020 and extending over several trading
days, Westbrook liquidated his options position and obtained a total profit of

25

approximately $1.04 million.
71. All told, between March 2019 and March 2020, Westbrook obtained a
total profit of approximately $1,422,015 from his trading of Company-3 securities
while he was aware of material nonpublic information about Company-3’s
financial results.
D. Hack of Company-4
72. During the Relevant Period, Company-4 was a Delaware corporation
headquartered in El Dorado, Arkansas. It had a class of shares registered under
Section 12(b) of the Exchange Act and its common stock traded on the NYSE.
73. On October 23, 2019, Westbrook hacked into Company-4’s computer
system by misrepresenting his identity and deceptively using the credentials of an
employee of Company-4.
74. Specifically, at approximately 7:19am EST, Westbrook reset the
password of a senior accounting executive of Company-4 (“Executive-4”) through
Company-4’s password reset portal—which used the same password reset portal
software used by Company-1, Company-2, and Company-5. After he reset the
password, Westbrook accessed Company-4’s computer system, including
Executive-4’s Office 365 account and Outlook and Company-4’s SharePoint

26

application.
4

75. While inside Executive-4’s Outlook, Westbrook created auto-
forwarding rules designed to send certain emails from Executive-4 to
Aleksandrdubois—the same anonymous email account that Westbrook used when
setting up auto-forwarding rules in the hack of Company-1. In particular, the auto-
forwarding rules were designed to forward any emails to Executive-4 that: (1)
contained attachments and (2) were sent by Company-4’s president or from an
audit partner at an accounting firm. The auto-forwarding rules were unsuccessful,
however, because Company-4’s computer systems had been configured to prohibit
email auto-forwarding.
76. Westbrook also deleted an email in Executive-4’s Outlook account
titled “Password Reset Acknowledgment” and an item called “Outlook Rules
Organizer.”
77. Furthermore, while inside Executive-4’s Outlook, Westbrook gained
access to documents and emails containing material nonpublic information about
Company-4’s financial results for the third quarter of its fiscal year 2019. This
included an October 22, 2019 email containing a draft of Company-4’s earnings
release for that quarter. The draft earnings release stated, among other positive

4
 SharePoint is a collaboration platform offered by Microsoft, which allows
employees to communicate, exchange information, and share files.

27

financial results, that Company-4’s “Net income was $69.2 million, or $2.18 per
diluted share, in Q3 2019 compared to net income of $45.0 million, or $1.38 per
diluted share, in Q3 2018” and its “Adjusted EBITDA grew 51% over the prior
year[.]”
78. Westbrook purchased Company-4’s securities based on information
he deceptively obtained and knew or recklessly disregarded was material and
nonpublic regarding Company-4’s financial results.
79. Starting on October 25, 2019 at approximately 12:15 pm EST—about
two days after the hack described above—Westbrook began purchasing Company-
4 call options. Between the time of the hack and Company-4’s scheduled earnings
announcement five days later, Westbrook purchased 1,342 Company-4 call options
across eight different option series, the majority of which were out-of-the-money.
Specifically, Westbrook purchased the following Company-4 call options for a
total cost of $259,805:
Call Options Purchased Expiration Date Strike Price
100 11/15/19 $95
138 11/15/19 $100
326 11/15/19 $105
120 12/20/19 $90
184 12/20/19 $95
194 12/20/19 $100
230 12/20/19 $105
50 1/17/20 $90

80. On October 30, 2019, after the stock market closed, Company-4

28

reported its financial results for the third quarter of its fiscal year 2019. Those
results reflected material information about Company-4’s earnings that was
included in the draft earnings release that Westbrook gained access to several days
earlier when he hacked into Company-4’s computer system, including that
Company-4’s net income was $69.2 million or $2.18 per diluted share, and its
adjusted EBITDA grew 51% over the prior year.
81. Company-4’s earnings announcement exceeded the consensus
expectations of securities market analysts, who had predicted that Company-4
would report $1.46 earnings per diluted share for the quarter.
82. By the close of regular market trading the following day, Company-
4’s stock price increased more than 24%—from a closing price of $94.84 on
October 30, 2019 to a closing price of $117.93 on October 31, 2019.
83. On October 31, 2019, shortly after the stock market opened,
Westbrook sold all of his Company-4 call options. As a result of his trading in
Company-4 securities in connection with this earnings announcement, Westbrook
obtained a total profit of approximately $1,398,436.
84. The options positions Westbrook established in Company-4 prior to
this earnings announcement were large and risky. Westbrook’s purchases of
Company-4 call options accounted for approximately 85% of all Company-4 call
options traded between October 28, 2019 and October 30, 2019. In fact, going into

29

the earnings announcement on October 30, 2019, Westbrook owned more
Company-4 call options than any other market participant and his call options
position was more than twice the size of the next largest holder of call options.
E. Hack of Company-5
85. During the Relevant Period, Company-5 was a Delaware corporation
headquartered in San Jose, California. It had a class of shares registered under
Section 12(b) of the Exchange Act and its common stock was traded on Nasdaq.
86. On February 3, 2020, Westbrook hacked into Company-5’s computer
system by misrepresenting his identity and deceptively using the credentials of an
employee of Company-5.
87. Specifically, at approximately 8:32am EST, Westbrook reset the
password of a senior marketing executive of Company-5 (“Executive-5”) through
Company-5’s password reset portal—which used the same password reset portal
software used by Company-1, Company-2, and Company-4. After he reset the
password, Westbrook accessed Company-5’s computer system, including
Executive-5’s Office 365 account and Outlook, and Company-5’s SharePoint and
OneDrive applications.
5

88. While inside Executive-5’s SharePoint and OneDrive applications,
Westbrook viewed documents containing material nonpublic information about

5
 OneDrive is an internet-based storage platform offered by Microsoft.

30

Company-5’s financial results for the second quarter of its fiscal year 2020.  For
example, Westbrook accessed a draft letter from Company-5’s CEO entitled “Q2
Earnings Email,” which stated, in part, that it had been an “incredible quarter for
[Company-5] with all time high record revenue, gross margin and operating
margin.”  The documents Westbrook viewed also included a draft video script,
titled “FY2020 Q2 Earnings Video Script,” for Company-5’s public earnings call
that was scheduled to occur before the stock market opened the next day, February
4, 2020. The draft video script described Company-5’s “record-breaking” second
quarter results, stating, in part, the following: “Revenue: $457.8M (high end of
guidance and new record); Gross Margin: 47.4% (new record); Operating Margin:
28.8% (well above guidance); [and] EPS [earnings per share]: $1.53 (well above
guidance).” (emphasis in original).
89. Westbrook also created an auto-forwarding rule in Executive-5’s
Outlook designed to send all of Executive-5’s emails after the rule was set up to an
anonymous email account, Harris.Slama—the same anonymous email account that
Westbrook used to receive auto-forwarded emails in the hack of Company-2. The
auto-forwarding rule was unsuccessful, however, because Company-5’s computer
systems had been configured to prohibit email auto-forwarding for all users.
90. Westbrook purchased Company-5’s securities based on information
he deceptively obtained and knew or recklessly disregarded was material and

31

nonpublic regarding Company-5’s financial results.
91. Starting on February 3, 2020, at approximately 10:14am EST—less
than two hours after the hack described above—Westbrook began purchasing
Company-5 call options. Between the time of the hack and Company-5’s
scheduled earnings announcement the next morning, Westbrook purchased 1,917
Company-5 call options across nine different option series, the majority of which
were out-of-the-money. Specifically, Westbrook purchased the following
Company-5 call options for a total cost of approximately $492,802:
Call Options Purchased Expiration Date Strike Price
100 2/14/20 $80
500 2/14/20 $82
135 2/14/20 $85
361 2/28/20 $85
150 2/28/20 $90
170 3/20/20 $75
240 3/20/20 $77.50
200 3/20/20 $80
61 3/20/20 $85

92. On February 4, 2020, at 7:30am EST, Company-5 reported its
financial results for the second quarter of its fiscal year 2020. Those results
reflected material information about Company-5’s earnings that was included in
the drafts to which Westbrook gained access the day before when he hacked into
Company-5’s computer system, including revenue of $457.8 million, gross margin
of 47.4%, operating margin of 28.8%, and earnings per diluted share of $1.53.

32

93. Company-5’s earnings announcement exceeded the consensus
expectations of securities market analysts, who had predicted that Company-5
would report adjusted earnings per share of $1.29.
94. By the close of regular market trading that day, Company-5’s stock
price increased 12%—from a closing price of $77.22 on February 3, 2020 to a
closing price of $86.52 on February 4, 2020.
95. On February 4, 2020 at 9:31am EST—less than two hours after
Company-5 reported its financial results—Westbrook began selling his Company-
5 call options. By the close of regular market trading that day, Westbrook obtained
a total realized and unrealized profit of $217,535 from his trading of Company-5
securities in connection with this earnings announcement.
96. The options positions Westbrook established in Company-5 prior to
this earnings announcement were large and risky. Westbrook’s purchases of
Company-5 call options accounted for approximately 25% of all Company-5 call
options traded on February 3, 2020. In fact, going into the earnings announcement
on February 4, 2020, Westbrook owned more Company-5 call options than any
other market participant.
III. Summary of Westbrook’s Profits from Trading in the Hacked Companies
97. Westbrook’s participation in this scheme was highly lucrative.
Westbrook obtained approximately $3.75 million in illicit profits by trading in the

33

securities of the Hacked Companies prior to the release of at least 14 earnings
announcements while he knew, or recklessly disregarded, that the information he
deceptively obtained from the Hacked Companies was material and nonpublic.
98. The following table summarizes Westbrook’s trading in connection
with those 14 earnings announcements:
Issuer and
Date of
Earnings
Announce
ment
Pre-
Announcement
Closing Equity
Price
Post-
Announcement
Closing Equity
Price
Equity
Price %
Change
Profit Return
Company-1
1/30/2019
$38.13 $27.67 -27.43% $322,781 249%
Company-3
3/6/2019
$86.46 $90.22 4.35% $236,492 48%
Company-2
5/8/2019
$19.49 $17.05 -12.52% $40,679 24%
Company-3
6/4/2019
$98.10 $95.15 -3.01% $146,667 21%
Company-2
8/8/2019
$11.05 $9.98 -9.68% $25,673 1%
Company-3
9/5/2019
$95.41 $109.41 14.67% -$149,285 -49%
Company-4
10/30/2019
$94.84 $117.93 24.35% $1,398,436 538%
Company-2
11/6/2019
$15.71 $18.47 17.57% -$144,724 -58%
Company-3
12/5/2019
$119.33 $110.77 -7.17% -$39,629 -1%

34

Issuer and
Date of
Earnings
Announce
ment
Pre-
Announcement
Closing Equity
Price
Post-
Announcement
Closing Equity
Price
Equity
Price %
Change
Profit Return
Company-5
2/4/2020
$77.22 $86.52 12.04% $217,535 44%
Company-2
2/26/2020
$11.94 $12.07 1.09% $14,639 74%
Company-3
3/4/2020
$112.48 $93.56 -16.82% $1,038,855 132%
Company-2
5/6/2020
$6.19 $8.03 29.73% $310,485 39%
Company-2
7/29/2020
$12.28 $12.32 0.33% -$4,279 -18%

Total
Profits
(Excluding
Losses)
   $3,752,242 91%

IV.  Westbrook Hacked into the Hacked Companies
99. Forensic data, blockchain data, and other data establish that
Westbrook hacked into the Hacked Companies to obtain their nonpublic earnings
information.
100. Westbrook’s payment to and use of a VPN service provider (“VPN
Service Provider-1”) identifies Westbrook as the person who hacked into the
Hacked Companies.
a. On October 22, 2019, Westbrook, through a Bitcoin wallet he

35

controlled, sent a Bitcoin payment equal to approximately
$36.93 to VPN Service Provider-1 for a yearly subscription for
its VPN services.
b. A subsequent email sent to one of the anonymous email
accounts—Aleksandrdubois, which was used in the hacking of
Company-1 and Company-4—confirmed that a yearly
subscription to VPN Service Provider-1’s VPN service
commenced approximately twenty seconds after Westbrook
sent that Bitcoin payment to VPN Service Provider-1.
c. That same day, VPN Service Provider-1’s VPN service was
used from the same IP address to sign into (i) one of the
anonymous email accounts (Harris.Slama) that was used in the
hacking of Company-2 and Company-5 and (ii) an email
account (LoraineRanos796[@]aol.com) (“LoraineRanos”) that
was the recovery email account for two of the anonymous email
accounts (Aleksandrdubois and Barnesbainesbjorn) used in the
hacking of the Hacked Companies.
d. The next morning, VPN Service Provider-1’s VPN service was
used in the hack into Company-4’s computer system described
above.

36

e. About two days later, on October 25, Westbrook began
purchasing call options in Company-4 in advance of its
earnings announcement.
101. Moreover, Westbrook engaged in other conduct that further
establishes him as the hacker in this hack-to-trade scheme.
a. During the Relevant Period, Westbrook used several VPN
services. Each of the hacks discussed above took place using
VPN services to which Westbrook subscribed. For example, on
or about December 24, 2018, Westbrook purchased a yearly
subscription to another VPN service provider (“VPN Service
Provider-2”). The next month, an IP address attributed to VPN
Service Provider-2 was used to access the Harris.Slama email
account and the LoraineRanos email account. And during the
Relevant Period, Westbrook had an active subscription to a
third VPN service provider (“VPN Service Provider-3”). IP
addresses attributed to VPN Service Provider-3 were used in
the hacking of Company-5. IP addresses attributed to VPN
Service Provider-3 were also used to access the
Barnesbainesbjorn account, which was used in the hacking of
Company-3.

37

b. During the Relevant Period, Westbrook made payments to an
online directory service provider and an online genealogy
company. Both of those companies provide personal and family
information that could be used to guess the answers to the
security questions that employees at the Hacked Companies
may have used to reset their passwords.
c. Westbrook subscribed to at least five CAPTCHA
6
 solving
services. The self-service password reset portal software used
by four of the five Hacked Companies allowed the companies
to require CAPTCHA verification. CAPTCHA solving services
would have helped Westbrook bypass verification requirements
in his efforts to reset the passwords of the Hacked Companies’
senior executives.
d. Westbrook purchased at least five highly technical hacker
manuals, including “The Hacker Playbook 3: Practical Guide to
Penetration Testing” and “Tribe of Hackers: Cybersecurity
Advice from the Best Hackers in the World.”

6
 CAPTCHA is a type of security measure known as a challenge-response
authentication. It helps protect an account holder from password decryption by
completing a basic test that proves the account holder is human and not a computer
trying to break into a password protected account.

38

e. Westbrook opened over 50 email accounts, including
anonymous email accounts hosted by overseas service
providers known to be unreachable by law enforcement.
f. Westbrook purchased a vulnerability scanner, which is a
software tool designed to permit a user to test and exploit the
security of web applications.
g. Westbrook received email communications from online
platforms known to sell hacking applications.
102. Finally, Westbrook previously admitted that he possessed the
knowledge and technical computing skill to engage in acts akin to hacking. While
employed at a financial firm, Westbrook accessed and downloaded an entire
database from a third-party vendor—at a time when Westbrook and his colleagues
were not expected to access the database. When an internal investigation at the
financial firm revealed that Westbrook had downloaded the database, he admitted
that he wrote a computer script that enabled him to download all the data on the
database overnight.
V. Westbrook’s State of Mind and Efforts to Conceal His Conduct
103. At all times relevant to this Complaint, Westbrook acted knowingly
and/or recklessly in carrying out this scheme. He intended to hack into the

39

computer systems of the five Hacked Companies for the purpose of obtaining
material nonpublic information.
104. Westbrook traded profitably in the securities of the Hacked
Companies using the material nonpublic information he deceptively obtained, and
he knew or recklessly disregarded that this information was material and
nonpublic.
105. Westbrook repeatedly established large options positions in the
Hacked Companies shortly before they were set to make their public earnings
announcements. And those options positions were often out-of-the-money and/or
were set to expire in the near term—increasing the risk that those options would
expire worthless.
106. In addition, Westbrook sought to conceal his conduct from detection
in a variety of ways. This included:
a. Using computer technology (such as VPN services) to hide his
location;
b. Using affirmative misrepresentations to pose as others in order
to access the computer systems of the Hacked Companies;
c. Deploying anonymous email accounts;
d. Deleting emails in a senior executive’s account to cover up his
hacking in Company-4.

40

107. Moreover, Westbrook received emails from a company that sells
software to wipe evidence from devices. Those emails indicated that
Westbrook had previously purchased this software.
108. This evidence shows that Westbrook acted with the requisite scienter
when he executed this fraudulent scheme and took efforts to conceal his conduct.
VI. Conclusion
109. As detailed above, Westbrook executed a fraudulent hack-to-trade
scheme. Westbrook deceptively obtained material nonpublic information from the
Hacked Companies’ computer systems and then used that information to trade
profitably in the securities of the Hacked Companies in advance of their earnings
announcements.
110. In perpetuating that fraudulent scheme, Westbrook made material
misrepresentations, affirmatively misrepresented himself and his identity, and
employed a variety of deceptive and fraudulent devices, contrivances, artifices,
practices, means, and acts in order to access the computer systems of five Hacked
Companies and to obtain nonpublic information about the Hacked Companies’
earnings.
111. Westbrook did so for the purpose of using that information to trade in
the securities of the Hacked Companies.
112. And Westbrook did just that. Based on deceptively-obtained

41

information that he knew or recklessly disregarded was material and nonpublic,
Westbrook purchased the Hacked Companies’ securities and then sold them
following the Hacked Companies’ earnings announcements, obtaining illicit profits
of approximately $3.75 million.
CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder

113. The Commission re-alleges and incorporates by reference here the
allegations in paragraphs 1 through 112.
114. By engaging in the conduct described above, the Defendant
knowingly or recklessly, in connection with the purchase or sale of securities,
directly or indirectly, by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange:
a. employed devices, schemes, or artifices to defraud;
b. made untrue statements of a material fact or omitted to state
material facts necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading; and/or
c. engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon any person.

42

115. By engaging in the foregoing conduct, the Defendant violated, and
unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a
Final Judgment:
I.
Permanently restraining and enjoining Westbrook and his agents, servants,
employees and attorneys and all persons in active concert or participation with any
of them from violating, directly or indirectly, Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder [17 C.F.R. §§ 240.10b-5(b)].
II.
Ordering Westbrook to disgorge all illicit profits, avoided losses, or other ill-
gotten gains he received, directly or indirectly, with prejudgment interest thereon,
as a result of the violations alleged in this Complaint, pursuant to Sections
21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3),
78u(d)(5), and 78u(d)(7)].
III.
Ordering Westbrook to pay a civil penalty pursuant to Section 21A of the
Exchange Act [15 U.S.C. § 78u-1] or, alternatively, to pay a civil penalty under

43

Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
IV.
Granting any other and further relief this Court may deem just, equitable, or
necessary.
JURY DEMAND
 The Commission demands a trial by jury.
Dated: New York, New York
September 27, 2024

/s/ Russell J. Feldman
Joseph G. Sansone
Jorge Tenreiro
Alison R. Levine
Russell J. Feldman
Karolina Klyuchnikova
U.S. Securities and Exchange Commission
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-9144 (Feldman)
[email protected]

Attorneys for Plaintiff
Securities and Exchange Commission

44

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

ROBERT B. WESTBROOK,

                                             Defendant.

Civil Action No.

DESIGNATION OF
AGENT FOR SERVICE

 Pursuant to Local Rule 101.1(f), because the Securities and Exchange
Commission (the “Commission”) does not have an office in this district, the United
States Attorney for the District of New Jersey is hereby designated as eligible as an
alternative to the Commission to receive service of all notices or papers in the
captioned action.

45

Therefore, service upon the United States or its authorized designee, David
Dauenheimer, Deputy Chief, Health Care Fraud Unit, United States Attorney’s
Office for the District of New Jersey, 970 Broad Street, Suite 700, Newark, NJ
07102, shall constitute service upon the Commission for purposes of this action.

Respectfully submitted,

/s/ Russell J. Feldman
Joseph G. Sansone
Jorge G. Tenreiro
Alison R. Levine
Russell J. Feldman
Karolina Klyuchnikova
U.S. Securities and Exchange Commission
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-9144 (Feldman)
[email protected]

Attorneys for Plaintiff
Securities and Exchange Commission

JS 44   (Rev. 04/21)
CIVIL COVER SHEET
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JUDGEDOCKET NUMBER
DATESIGNATURE OF ATTORNEY OF RECORD
FOR OFFICE USE ONLY
RECEIPT #AMOUNTAPPLYING IFPJUDGEMAG. JUDGE
26 USC 7609
INTELLECTUAL
Securities and Exchange CommissionRobert B. Westbrook
Joseph G. Sansone, Jorge G. Tenreiro, Alison R. Levine, Russell J. Feldman, and Karolina Klyuchnikova
Securities and Exchange Commission
100 Pearl Street, Suite 20-100
New York, NY 10004-2616 (212) 336-1100
United Kingdom
X
15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5
09/27/2024
Securities fraud

Joseph G. Sansone 

Jorge G. Tenreiro 

Alison R. Levine 

Russell J. Feldman 

Karolina Klyuchnikova 

U.S. Securities and Exchange Commission 

New York Regional Office 

100 Pearl Street  

Suite 20-100 

New York, NY 10004-2616 

212-336-9144 (Feldman) 

[email protected]  

 

UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
ROBERT B. WESTBROOK,    

  
                                             Defendant. 
 
 

 
 

  
Civil Action No. 
 
Complaint for Violations 
of the Federal Securities 
Laws 

   

Jury Trial Demanded 

  

           

          

 

Plaintiff Securities and Exchange Commission (“Commission”), located at 

100 Pearl Street, Suite 20-100, New York, New York 10004-2616, alleges as 

follows against Robert B. Westbrook (“Westbrook” or the “Defendant”), whose 

last known address is 5B Radnor Walk, Chelsea, London SW3 4BP, United 

Kingdom: 

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SUMMARY 

1. This is a “hack-to-trade” case. Specifically, this case involves a 

fraudulent scheme by Westbrook to hack into the computer systems of U.S. public 

companies to deceptively obtain material nonpublic information about their 

corporate earnings and to use that information to profit by trading in advance of the 

companies’ public earnings announcements. 

2. Between approximately January 2019 and August 2020 (the “Relevant 

Period”), Westbrook directly or indirectly made material misstatements and used 

deceptive means to access the computer systems of at least five companies with 

shares of stock publicly traded on U.S. securities exchanges (each a “Hacked 

Company” and collectively the “Hacked Companies”).1 This included that 

Westbrook: used the credentials of the Hacked Companies’ employees without 

authorization (e.g., usernames and passwords that did not belong to Westbrook); 

made affirmative misrepresentations that he was one of those employees or other 

legitimate user of the Hacked Companies’ computer systems; and used tools and 

techniques to conceal his identity and location while conducting the hacking.  

3. Westbrook gained unauthorized access into the Hacked Companies’ 

computer systems to obtain pre-release corporate earnings information—including 

 
1 As explained further below, the “Hacked Companies” are identified herein as 

“Company-1,” “Company-2,” “Company-3,” “Company-4,” and “Company-5.” 

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draft earnings releases, press releases, and scripts—and then used that information 

to trade in the securities of the Hacked Companies in advance of their public 

earnings announcements. Prior to these public earnings announcements, 

Westbrook established large and risky options positions in the Hacked Companies’ 

securities, and often sold out of those positions shortly after the public earnings 

announcements.   

4. In deceptively obtaining nonpublic earnings information from the 

Hacked Companies and trading in their securities in advance of at least 14 earnings 

announcements, Westbrook reaped approximately $3.75 million in illicit profits.2 

5. By engaging in this conduct, Westbrook violated Section 10(b) of the 

Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5].  

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

6. The Commission brings this action pursuant to the authority conferred 

upon it by Sections 21 and 21A of the Exchange Act [15 U.S.C. §§ 78u, 78u-1]. 

7. The Commission seeks a final judgment: (a) permanently enjoining 

Westbrook from violating the federal securities laws and rules this Complaint 

 
2 Westbrook’s trades in advance of four of the 14 earnings announcements were 

unprofitable, even though he traded based on material nonpublic information. 

These unprofitable trades were excluded from the calculation of Westbrook’s illicit 

profits.   

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alleges he has violated; (b) ordering Westbrook to disgorge all ill-gotten gains he 

received as a result of the violations alleged herein and to pay prejudgment interest 

thereon, pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act 

[15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and (c) ordering Westbrook to 

pay a civil money penalty pursuant to Sections 21A(a) or 21(d) of the Exchange 

Act [15 U.S.C. §§ 78u-1, 78u(d)(3)]. The Commission seeks any other relief the 

Court may deem appropriate pursuant to Section 21(d)(5) of the Exchange Act [15 

U.S.C. § 78u(d)(5)].   

JURISDICTION AND VENUE 

8. This Court has jurisdiction over this action pursuant to Sections 21(d), 

21(e), 21A and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 77u(e), 78u-1, and 

78aa]. Westbrook, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce, or of the mails, or the facilities of a 

national securities exchange in connection with the transactions, acts, practices, 

and courses of business alleged in this Complaint. Westbrook deceptively obtained 

material nonpublic information from U.S. public companies and used the 

information to make securities trades that were cleared through U.S.-based 

brokerage firms and placed on multiple national securities exchanges, in a manner 

that used the instrumentalities of interstate commerce. 

9. Venue lies in this District under Section 27 of the Exchange Act [15 

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U.S.C. § 78aa]. Certain of the purchases and sales of securities and acts, practices, 

transactions, and courses of business constituting violations alleged in this 

Complaint occurred within this District, and were effected, directly or indirectly, 

by making use of the means, instruments, or instrumentalities of transportation or 

communication in interstate commerce, or of the mails, or the facilities of national 

securities exchanges. Specifically, many of the illegal securities transactions were 

conducted using various national securities exchanges, such as the Nasdaq Global 

Market Select (“Nasdaq”) and the New York Stock Exchange (“NYSE”), including 

one or more transactions that was processed using data servers located in New 

Jersey. Furthermore, under 28 U.S.C. § 1391(c)(3), venue lies in this District 

because Westbrook, as a foreign national residing outside the United States, may 

be sued in any judicial district. 

DEFENDANT 

10. Robert B. Westbrook, age 38, is a citizen and resident of the United 

Kingdom. Westbrook holds himself out as having studied economics at the 

University of Oxford, and he worked in several positions in the financial industry 

in London. During the Relevant Period, Westbrook held several brokerage 

accounts with firms based in the United States and held several brokerage accounts 

with firms in the United Kingdom. 

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TERMS USED IN THIS COMPLAINT 

11. A stock option, commonly referred to as an “option,” gives its 

purchaser-holder the right to buy or sell shares of an underlying stock at a specified 

price (the “strike” price) prior to the expiration date. Options are generally sold in 

“contracts,” which give the option holder the opportunity to buy or sell 100 shares 

of the underlying stock. 

12. A “call” option gives the purchaser-holder of the option the right, but 

not the obligation, to purchase a specified amount of an underlying security at a 

specified strike price within a specific time period. Generally, the buyer of a call 

option anticipates that the price of the underlying security will increase during a 

specified amount of time, allowing the buyer of the call option to make a profit 

from the difference between the higher market price of the underlying security and 

the strike price (less the cost of the option). 

13. A “put” option gives the holder of the option the right, but not the 

obligation, to sell a specified amount of an underlying security at a specified strike 

price within a specific time period. Generally, the buyer of a put option anticipates 

that the price of the underlying security will decrease during a specified amount of 

time, allowing the buyer of the put option to make a profit from the difference 

between the strike price (less the cost of the option) and the lower market price of 

the underlying security.  

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14. An out-of-the-money call option refers to an option that would expire 

worthless unless the price of the underlying stock rose by a certain amount before 

expiration. Specifically, in the case of a call option, out-of-the-money refers to a 

scenario where the strike price is higher than the market price of the stock that 

underlies the call option. 

15. An out-of-the-money put option refers to an option that would expire 

worthless unless the price of the underlying stock fell by a certain amount before 

expiration. Specifically, in the case of a put option, out-of-the-money refers to a 

scenario where the strike price is lower than the market price of the stock that 

underlies the put option. 

16. Generally, the higher the strike price is above the stock price, the 

more inexpensive the call option will be to purchase. This is because it would take 

an upward move in the price of the underlying stock that is large enough to surpass 

the option’s strike price for the call option to become in-the-money and become 

more valuable—and thus avoid expiring worthless. As a result, the higher the 

strike price of a call option is above the stock price, the greater the risk the call 

option will expire worthless. 

17. Similarly, the nearer an out-of-the-money call option is to its 

expiration date, the greater the risk the call option will expire worthless. This 

results from the fact that there is simply less time for the price of the underlying 

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stock to rise enough to make the call option more valuable and avoid expiring 

worthless. 

18. Likewise, the lower the strike price of a put option is below the stock 

price, the more inexpensive the put option will be to purchase. This is because it 

would take a downward move in the price of the underlying stock that is large 

enough to fall below the option’s strike price for the put option to become in-the-

money and become more valuable and thus avoid expiring worthless. As a result, 

the lower the strike price is below the stock price, the greater the risk the put option 

will expire worthless. 

19. Similarly, the nearer an out-of-the-money put option is to its 

expiration date, the greater the risk the put option will expire worthless. This 

results from the fact that there is simply less time for the price of the underlying 

stock to fall enough to make the put option more valuable and avoid expiring 

worthless. 

20. An “internet protocol address” or “IP address” is a unique number 

required for online activity conducted by a computer or other device connected to 

the internet. Computers use the unique identifier to send data to specific computers 

on a network. Often, IP addresses can be used to identify the geographic location 

of the server through which a computer accessed the internet. Thus, an IP address 

is like a return address on a letter. Additionally, an individual can conceal the IP 

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address from which he or she is accessing the internet through a number of 

different techniques and tools. 

21. A “virtual private network” or “VPN” is one such tool that an 

individual can use to conceal his or her IP address. A VPN enables an individual to 

assume and use IP addresses different from his or her own, including IP addresses 

associated with different geographical regions. 

FACTS 

I. Overview of the Hack-to-Trade Scheme 

22. During the Relevant Period, Westbrook engaged in an unlawful 

scheme in which he directly or indirectly used deceptive means to access the 

computer systems of at least five publicly-traded U.S. companies and then used 

that information to trade in advance of their earnings announcements.  

23. Each of the Hacked Companies is a company that has shares of stock 

that are registered under Section 12(b) of the Exchange Act and that are publicly 

traded on a U.S. national securities exchange. In connection with their reporting 

obligations under the securities laws, the Hacked Companies prepared periodic and 

other reports to be filed with the Commission and disseminated to the investing 

public, including materials relating to the Hacked Companies’ earnings. This 

included, among other things, drafts of earnings releases, press releases, and scripts 

for earnings announcements and related internal emails.  

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24. The information contained in these documents and emails was 

nonpublic because it had not yet been published or filed in a manner designed to 

achieve a broad dissemination to the investing public generally and without 

favoring any person or group. 

25. The information contained in these documents and emails was also 

material. The Hacked Companies’ information would have been important to the 

reasonable investor and viewed by the reasonable investor as having significantly 

altered the total mix of information made available. Information about a 

company’s earnings is material because it relates to, among other things, a public 

company’s financial condition, solvency, and profitability. For example, public 

disclosure of earnings information frequently leads to a change in the price of a 

company’s stock. It is common for financial analysts to estimate and/or model a 

given company’s quarterly or annual earnings. The market reaches a consensus 

expectation based in part on these different estimates. When a company releases its 

earnings announcements, the price at which shares of that company’s stock trade 

often increases (if earnings exceed market expectations) or decreases (if earnings 

fall short of market expectations). 

26. Westbrook knowingly, or with reckless disregard, made material 

misrepresentations, affirmatively misrepresented his identity, and employed a 

variety of deceptive and fraudulent devices, contrivances, artifices, practices, 

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means, and acts to access the computer systems of the five Hacked Companies. 

Specifically, Westbrook used, among other things: deceptively-obtained 

credentials of the Hacked Companies’ employees; VPN services to conceal the IP 

address from which he accessed the internet; and anonymous email accounts to 

conceal his identity.  

27. The hacking incidents each followed a similar pattern, with some 

limited exceptions, and occurred before the Hacked Companies were set to 

publicly announce earnings.  

a. First, Westbrook reset a senior executive’s computer system 

password at each of the Hacked Companies. Four of the five 

Hacked Companies used the same password reset portal 

software.  

b. Second, Westbrook used the senior executive’s username and 

reset password to access the Hacked Company’s computer 

system, including the senior executive’s Microsoft Office 365 

(“Office 365”) account and Microsoft Outlook email account 

(“Outlook”). In each hacking incident, the senior executive’s 

Outlook contained emails with material nonpublic information 

about the Hacked Company’s upcoming earnings 

announcement.  

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c. Third, Westbrook set up (or attempted to set up) email auto-

forwarding rules in the senior executive’s Outlook. Those rules 

were designed to forward emails containing nonpublic 

information about the Hacked Company’s earnings from the 

senior executive’s Outlook to one of several anonymous email 

accounts that Westbrook accessed.  

d. Fourth, in advance of the Hacked Company’s public earnings 

announcement, Westbrook purchased stock and/or options in 

the Hacked Company based on the nonpublic earnings 

information that he deceptively obtained.  

e. And finally, Westbrook typically liquidated his securities 

positions in the Hacked Company shortly after its public 

earnings announcement and reaped significant profits. 

28. Westbrook placed securities trades in the Hacked Companies on 

national securities exchanges through U.S.-based broker dealers, in a manner that 

utilized instrumentalities of interstate commerce. 

29. By repeatedly engaging in this course of conduct—deceptively 

obtaining information from the Hacked Companies that he knew or recklessly 

disregarded was material and nonpublic and then trading in their securities in 

advance of their earnings announcements—Westbrook reaped approximately $3.75 

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million in illicit profits. 

II. Examples of the Hack-to-Trade Scheme 

30. Below are several examples where Westbrook deceptively obtained 

material nonpublic information from the Hacked Companies and traded profitably 

in the securities of the Hacked Companies based on that information. 

A. Hack of Company-1 

31. During the Relevant Period, Company-1 was a Delaware corporation 

headquartered in Orlando, Florida. It had a class of shares registered under Section 

12(b) of the Exchange Act and its common stock traded on the NYSE. 

32. On January 26, 2019, Westbrook hacked into Company-1’s computer 

system by misrepresenting his identity and deceptively using the credentials of an 

employee of Company-1.  

33. Specifically, Westbrook reset the password of a senior finance 

executive of Company-1 (“Executive-1”) through Company-1’s password reset 

portal. After he reset the password, Westbrook accessed Company-1’s computer 

system, including Executive-1’s Outlook.  

34. While inside Company-1’s computer system, Westbrook gained 

access to documents and emails containing material nonpublic information about 

Company-1’s earnings for the fourth quarter of its fiscal year 2018. These emails 

included one that Executive-1 received on January 22, 2019, which contained a 

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draft press release about the company’s fourth quarter financial results. The draft 

press release stated, among other things, that Company-1’s net sales were down 

14% and that its dividend would be $0.27 per share. The draft press release also 

forecast its fiscal year 2019 earnings per share in the range of $4.06 to $4.21. This 

was negative news because, by comparison, Company-1 paid a dividend of $0.68 

per share in the prior quarter, and the consensus expectations of securities market 

analysts predicted earnings per share for the same period of $4.45. 

35. While inside Executive-1’s Outlook, Westbrook also created auto-

forwarding rules designed to send all emails that Executive-1 received containing 

attachments to Aleksandrdubois1[@]gmail.com (“Aleksandrdubois”)—an 

anonymous email account that Westbrook accessed. The auto-forwarding rules 

were likely unsuccessful, however, because Company-1’s computer systems had 

been configured to prevent email auto-forwarding for all users.  

36. Westbrook purchased Company-1’s securities based on information 

he deceptively obtained and knew or recklessly disregarded was material and 

nonpublic regarding Company-1’s financial results.  

37. Starting on January 28, 2019 at approximately 3:20 pm EST—less 

than two days before Company-1 publicly announced its financial results for the 

fourth quarter of its fiscal year 2018—and continuing the next day, Westbrook 

purchased a total of 670 Company-1 put options across five different option series. 

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Specifically, Westbrook purchased the following Company-1 put options at a total 

cost of $129,429:  

Put Options Purchased Expiration Date Strike Price 

50 2/15/19 $30 

110 2/15/19 $35 

200 2/15/19 $40 

230 3/15/19 $35 

80 3/15/19 $40 

 

38. The next day, on January 29, 2019, Westbrook sent an email to 

another individual stating, “Wanted to flag my idea on [Company-1], which I have 

reasonable conviction on (as reflected in the sizing relative to the portfolio) . . . this 

is my favorite idea – my view is there is significant guidance risk here.”    

39. On January 30, 2019, at approximately 7am EST, Company-1 

reported its financial results for the fourth quarter of its fiscal year 2018 and 

announced the dividend it would be paying to shareholders. Those results reflected 

material information about Company-1’s earnings that was included in the draft 

press release that Westbrook gained access to when he hacked into Company-1’s 

computer system several days earlier, including that Company-1’s net sales were 

down 14%, that its dividend would be 27 cents per share, and that the forecast for 

its fiscal year 2019 earnings per share was in the range of $4.06 to $4.21. 

40. By the close of regular market trading that day, Company-1’s stock 

price declined 27%—from a closing price of $38.13 on January 29, 2019 to a 

closing price of $27.67 on January 30, 2019. 

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41. On January 30, 2019, the same day that Company-1 reported its 

financial results, Westbrook sold his entire position of  Company-1 put options for 

proceeds of $452,210. As a result of his trading in Company-1 securities in 

connection with this earnings announcement, Westbrook obtained a total profit of 

approximately $322,781. 

42. The options positions Westbrook established in Company-1 prior to 

this earnings announcement were large and risky. Westbrook’s purchases of 

Company-1 put options on January 28, 2019 accounted for approximately 16% of 

all Company-1 put options traded that day.3 Similarly, Westbrook’s purchases of 

Company-1 put options on January 29, 2019 accounted for approximately 32% of 

all Company-1 put options traded that day. In fact, going into Company-1’s 

earnings announcement on January 30, 2019, Westbrook was the only retail holder 

of more than 200 Company-1 put options. 

B. Hack of Company-2  

43. During the Relevant Period, Company-2 was a Massachusetts 

corporation headquartered in Los Angeles, California. It had a class of shares 

registered under Section 12(b) of the Exchange Act and its common stock traded 

on the NYSE. 

 
3 Westbrook’s purchases of Company-1 put options also accounted for 

approximately 78% of all Company-1 put options expiring in February 2019 that 

traded in the market on January 28, 2019. 

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44. On or about February 15, 2019, Westbrook hacked into Company-2’s 

computer system. Company-2 used the same password reset portal software as 

Company-1, Company-4, and Company-5. 

45. Specifically, Westbrook gained access to and set up an auto-

forwarding rule in the Outlook email account of a senior accounting executive of 

Company-2 (“Executive-2”). That auto-forwarding rule was designed to send 

emails that Executive-2 received from any of four specified Company-2 employees 

to Harris.Slama402[@]aol.com (“Harris.Slama”)—an anonymous email account 

that Westbrook accessed. That auto-forwarding rule began on or about February 

15, 2019 and continued until at least January 2021. 

46. As a result of the email auto-forwarding rule, Westbrook accessed 

emails containing material nonpublic information about Company-2’s unreported 

financial results. For instance, emails auto-forwarded from Executive-2’s Outlook 

to Harris.Slama between approximately April 30, 2020 and May 6, 2020 contained 

nonpublic information about Company-2’s financial results for the first quarter of 

its fiscal year 2020. This forwarded information included an April 30, 2020 draft 

earnings call script, which stated, among other things, “Our first-quarter results 

were outstanding and well ahead of expectations”; the company “delivered double-

digit revenue growth across all our segments”; “[r]evenue for the first quarter was 

$1.3 billion, up 30%”; and net income for “the first quarter of 2020 was $17.4 

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million, or $0.34 per diluted share.” The forwarded information also included a 

May 1, 2020 draft Form 10-Q for the first quarter of its fiscal year 2020, which 

similarly reflected a revenue for the quarter of approximately $1.3 billion and 

diluted earnings per share of $0.34. 

47. Westbrook purchased Company-2’s securities based on information 

he deceptively obtained and knew or recklessly disregarded was material and 

nonpublic regarding Company-2’s financial results.  

48. Starting on May 4, 2020—two days before Company-2 was scheduled 

to announce its financial results—Westbrook purchased Company-2 stock and 

3,706 Company-2 call options across eight different option series for a total cost of 

approximately $789,743. Specifically, Westbrook purchased 40,000 shares of 

Company-2 stock at a cost of $256,951, and the following Company-2 call options 

at a total cost of $532,792:  

Call Options Purchased Expiration Date Strike Price 

360 5/15/20 $5.00 

818 5/15/20 $7.50 

300 6/19/20 $5.00 

1000 6/19/20 $7.50 

200 10/16/20 $5.00 

812 10/16/20 $7.50 

200 12/18/20 $5.00 

16 12/18/20 $7.50 

  

49. On May 6, 2020, after the stock market closed, Company-2 

announced its financial results for the first quarter of its fiscal year 2020. Those 

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results reflected material information about Company-2’s earnings that was 

included in the draft earnings call script and draft Form 10-Q that Westbrook 

gained access to as a result of the email auto-forwarding rules he created in 

February 2019—such as revenue of $1.3 billion and diluted earnings per share of 

$0.34.  

50. Company-2’s earnings announcement reported higher revenue of $1.3 

billion compared to consensus expectations of securities market analysts of $1.03 

billion, and a higher diluted earnings per share number of $0.34 compared to 

consensus expectations of $0.06.  

51. By the close of regular market trading the next day, Company-2’s 

stock price had increased by approximately 30%—from a closing price of $6.19 on 

May 6, 2020 to a closing price of $8.03 on May 7, 2020. 

52. On May 7, 2020, the day after Company-2 announced its financial 

results, Westbrook sold half of his Company-2 stock and approximately 40% of his 

Company-2 call options, obtaining a realized profit of approximately $101,343. As 

of the close of trading that day, Westbrook’s remaining position in Company-2 

securities had generated unrealized profits of approximately $209,141, for a total 

realized and unrealized gain of approximately $310,485. 

53. The options positions Westbrook established in Company-2 prior to 

this earnings announcement were large and risky. Westbrook’s purchases of 

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Company-2 call options between May 4, 2020 and May 6, 2020 accounted for 

approximately 70% of all Company-2 call options purchased between those dates. 

In fact, going into Company-2’s earnings announcement on May 7, 2020, 

Westbrook owned more Company-2 call options than any other market participant. 

Westbrook’s call options position was more than six times the size of the call 

options position of the next largest holder.  

54. Notably, Westbrook traded in advance of Company-2’s earnings 

announcements from on or about the time that Executive-2’s emails were auto-

forwarded to the Harris.Slama account in February 2019 until May 2020—a period 

when Westbrook was aware of material nonpublic information about Company-2’s 

financial results. 

55. All told, Westbrook obtained total profits of approximately $391,475 

from his trading in Company-2 securities between May 2019 and May 2020.   

C. Hack of Company-3  

56. During the Relevant Period, Company-3 was a Delaware corporation 

headquartered in San Mateo, California. It had a class of shares registered under 

Section 12(b) of the Exchange Act and its common stock traded on the NYSE. 

57. On February 21, 2019, Company-3 issued a press release stating that 

it would announce its financial results for the second quarter of its fiscal year 2019 

on March 6, 2019 after market close. 

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58. The next day, on February 22, 2019, Westbrook hacked into 

Company-3’s computer system by misrepresenting his identity and deceptively 

using the credentials of an employee of Company-3.  

59. Specifically, Westbrook reset the computer system password of a 

senior finance executive of Company-3 (“Executive-3”). After he reset the 

password, Westbrook accessed Company-3’s computer system, including 

Executive-3’s Office 365 account and Outlook.  

60. While inside Executive-3’s Outlook, Westbrook created four auto-

forwarding rules designed to send certain emails from Executive-3 to 

barnesbainesbjorn[@]gmail.com (“Barnesbainesbjorn”)—an anonymous email 

account Westbrook accessed. In particular, the auto-forwarding rules were 

designed to forward, among others, emails containing attachments and Company-

3’s stock ticker in the email subject or body, as well as emails containing “script” 

in the email subject or body. Those auto-forwarding rules began to forward emails 

that same day and continued until approximately March 2021. 

61. While inside Executive-3’s Outlook, Westbrook gained access to 

documents and emails containing material nonpublic information about Company-

3’s financial results for the second quarter of its fiscal year 2019. This included a 

draft script of an earnings call that Executive-3 had received on February 19, 2019. 

That draft script stated, in part, that Company-3’s “[t]otal revenue in the quarter of 

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$168.6 million was above the high-end of our guidance range” and that the quarter 

was “characterized by strong business momentum.” Because of the email auto-

forwarding rules that Westbrook created above, subsequent drafts of this earnings 

call script were also sent to the Barnesbainesbjorn account. This included a 

February 23, 2019 draft script, which stated that Company-3’s “financial results 

exceeded our revenue and profitability guidance ranges, with total revenue of 

$169.3 million[.]” 

62. Westbrook purchased Company-3’s securities based on information 

he deceptively obtained and knew or recklessly disregarded was material and 

nonpublic regarding Company-3’s financial results.  

63. Starting on March 6, 2019 at 10:05am EST—the day that Company-3 

was scheduled to announce its financial results—Westbrook bought 5,000 shares 

of Company-3 stock and 285 Company-3 call options across four different option 

series for a total cost of approximately $494,325. Specifically, Westbrook 

purchased 5,000 shares of Company-3 stock at a cost of $433,275, and the 

following Company-3 call options at a total cost of $61,050: 

Call Options Purchased Expiration Date Strike Price 

20 3/15/19 $85 

190 3/15/19 $90 

25 4/18/19 $85 

50 4/18/19 $90 

  

64. On March 6, 2019, after the stock market closed, Company-3 

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announced its financial results for the second quarter of its fiscal year 2019. Those 

results reflected material information about Company-3’s earnings that was 

included in the draft earnings call script that Westbrook gained access to when he 

hacked into Company-3’s computer system—such as total revenue for the second 

quarter of $169.3 million.   

65. Company-3’s earnings announcement exceeded the consensus 

expectations of securities market analysts, who had predicted that the company’s 

total revenue for the quarter would be $159.71 million, as well as the company’s 

previously issued guidance ranges.  

66. By the close of regular market trading the next day, Company-3’s 

stock price had increased 4.3%—from a closing price of $86.46 on March 6, 2019 

to a closing price of $90.22 on March 7, 2019. 

67. On March 7, 2019, shortly after the stock market opened, Westbrook 

sold all of his stock and call options in Company-3. As a result of his trading in 

Company-3’s securities in connection with this earnings announcement, 

Westbrook obtained a total profit of approximately $236,492. 

68. The options positions Westbrook established in Company-3 prior to 

this earnings announcement were large and risky. Westbrook’s purchases of 

Company-3 call options on March 6, 2019 accounted for approximately 11% of all 

Company-3 call options traded that day. In fact, going into Company-3’s earnings 

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announcement that day, Westbrook was, by far, the single largest retail holder of 

Company-3 call options. 

69. Notably, Westbrook continued trading in advance of Company-3’s 

earnings announcements during the period of time when Executive-3’s emails 

continued to be auto-forwarded to the Barnesbainesbjorn account—from 

approximately March 2019 to approximately March 2020.  

70. In one example, Westbrook bought $786,364 worth of Company-3 put 

options in advance of the company’s second quarter earnings announcement that 

took place on March 4, 2020. He did so based on material nonpublic information 

about Company-3’s financial results for the second quarter of its fiscal year 2020 

that Westbrook gained access to because of the email auto-forwarding rule. This 

included a draft revenue forecast that reported second quarter revenue that was 

somewhat higher than analysts’ consensus estimates ($174 million vs. $166.39 

million), but also included forecasted revenue for its fiscal year 2020 that was 

significantly lower than analysts’ consensus estimates ($724.7 million vs. $766.09 

million). The earnings announcement reflected mixed news, where Company-3 

beat certain quarterly expectations but significantly lowered its previous revenue 

guidance. By the close of business the next day, Company-3’s stock price declined 

approximately 17%. Starting on March 5, 2020 and extending over several trading 

days, Westbrook liquidated his options position and obtained a total profit of 

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approximately $1.04 million. 

71. All told, between March 2019 and March 2020, Westbrook obtained a 

total profit of approximately $1,422,015 from his trading of Company-3 securities 

while he was aware of material nonpublic information about Company-3’s 

financial results.  

D. Hack of Company-4  

72. During the Relevant Period, Company-4 was a Delaware corporation 

headquartered in El Dorado, Arkansas. It had a class of shares registered under 

Section 12(b) of the Exchange Act and its common stock traded on the NYSE. 

73. On October 23, 2019, Westbrook hacked into Company-4’s computer 

system by misrepresenting his identity and deceptively using the credentials of an 

employee of Company-4. 

74. Specifically, at approximately 7:19am EST, Westbrook reset the 

password of a senior accounting executive of Company-4 (“Executive-4”) through 

Company-4’s password reset portal—which used the same password reset portal 

software used by Company-1, Company-2, and Company-5. After he reset the 

password, Westbrook accessed Company-4’s computer system, including 

Executive-4’s Office 365 account and Outlook and Company-4’s SharePoint 

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application.4  

75. While inside Executive-4’s Outlook, Westbrook created auto-

forwarding rules designed to send certain emails from Executive-4 to 

Aleksandrdubois—the same anonymous email account that Westbrook used when 

setting up auto-forwarding rules in the hack of Company-1. In particular, the auto-

forwarding rules were designed to forward any emails to Executive-4 that: (1) 

contained attachments and (2) were sent by Company-4’s president or from an 

audit partner at an accounting firm. The auto-forwarding rules were unsuccessful, 

however, because Company-4’s computer systems had been configured to prohibit 

email auto-forwarding. 

76. Westbrook also deleted an email in Executive-4’s Outlook account 

titled “Password Reset Acknowledgment” and an item called “Outlook Rules 

Organizer.” 

77. Furthermore, while inside Executive-4’s Outlook, Westbrook gained 

access to documents and emails containing material nonpublic information about 

Company-4’s financial results for the third quarter of its fiscal year 2019. This 

included an October 22, 2019 email containing a draft of Company-4’s earnings 

release for that quarter. The draft earnings release stated, among other positive 

 
4 SharePoint is a collaboration platform offered by Microsoft, which allows 

employees to communicate, exchange information, and share files. 

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financial results, that Company-4’s “Net income was $69.2 million, or $2.18 per 

diluted share, in Q3 2019 compared to net income of $45.0 million, or $1.38 per 

diluted share, in Q3 2018” and its “Adjusted EBITDA grew 51% over the prior 

year[.]”   

78. Westbrook purchased Company-4’s securities based on information 

he deceptively obtained and knew or recklessly disregarded was material and 

nonpublic regarding Company-4’s financial results.  

79. Starting on October 25, 2019 at approximately 12:15 pm EST—about 

two days after the hack described above—Westbrook began purchasing Company-

4 call options. Between the time of the hack and Company-4’s scheduled earnings 

announcement five days later, Westbrook purchased 1,342 Company-4 call options 

across eight different option series, the majority of which were out-of-the-money. 

Specifically, Westbrook purchased the following Company-4 call options for a 

total cost of $259,805: 

Call Options Purchased Expiration Date Strike Price 

100 11/15/19 $95 

138 11/15/19 $100 

326 11/15/19 $105 

120 12/20/19 $90 

184 12/20/19 $95 

194 12/20/19 $100 

230 12/20/19 $105 

50 1/17/20 $90 

 

80. On October 30, 2019, after the stock market closed, Company-4 

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reported its financial results for the third quarter of its fiscal year 2019. Those 

results reflected material information about Company-4’s earnings that was 

included in the draft earnings release that Westbrook gained access to several days 

earlier when he hacked into Company-4’s computer system, including that 

Company-4’s net income was $69.2 million or $2.18 per diluted share, and its 

adjusted EBITDA grew 51% over the prior year.  

81. Company-4’s earnings announcement exceeded the consensus 

expectations of securities market analysts, who had predicted that Company-4 

would report $1.46 earnings per diluted share for the quarter.  

82. By the close of regular market trading the following day, Company-

4’s stock price increased more than 24%—from a closing price of $94.84 on 

October 30, 2019 to a closing price of $117.93 on October 31, 2019. 

83. On October 31, 2019, shortly after the stock market opened, 

Westbrook sold all of his Company-4 call options. As a result of his trading in 

Company-4 securities in connection with this earnings announcement, Westbrook 

obtained a total profit of approximately $1,398,436.  

84. The options positions Westbrook established in Company-4 prior to 

this earnings announcement were large and risky. Westbrook’s purchases of 

Company-4 call options accounted for approximately 85% of all Company-4 call 

options traded between October 28, 2019 and October 30, 2019. In fact, going into 

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the earnings announcement on October 30, 2019, Westbrook owned more 

Company-4 call options than any other market participant and his call options 

position was more than twice the size of the next largest holder of call options. 

E. Hack of Company-5  

85. During the Relevant Period, Company-5 was a Delaware corporation 

headquartered in San Jose, California. It had a class of shares registered under 

Section 12(b) of the Exchange Act and its common stock was traded on Nasdaq. 

86. On February 3, 2020, Westbrook hacked into Company-5’s computer 

system by misrepresenting his identity and deceptively using the credentials of an 

employee of Company-5.   

87. Specifically, at approximately 8:32am EST, Westbrook reset the 

password of a senior marketing executive of Company-5 (“Executive-5”) through 

Company-5’s password reset portal—which used the same password reset portal 

software used by Company-1, Company-2, and Company-4. After he reset the 

password, Westbrook accessed Company-5’s computer system, including 

Executive-5’s Office 365 account and Outlook, and Company-5’s SharePoint and 

OneDrive applications.5 

88. While inside Executive-5’s SharePoint and OneDrive applications, 

Westbrook viewed documents containing material nonpublic information about 

 
5 OneDrive is an internet-based storage platform offered by Microsoft. 

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Company-5’s financial results for the second quarter of its fiscal year 2020.  For 

example, Westbrook accessed a draft letter from Company-5’s CEO entitled “Q2 

Earnings Email,” which stated, in part, that it had been an “incredible quarter for 

[Company-5] with all time high record revenue, gross margin and operating 

margin.”  The documents Westbrook viewed also included a draft video script, 

titled “FY2020 Q2 Earnings Video Script,” for Company-5’s public earnings call 

that was scheduled to occur before the stock market opened the next day, February 

4, 2020. The draft video script described Company-5’s “record-breaking” second 

quarter results, stating, in part, the following: “Revenue: $457.8M (high end of 

guidance and new record); Gross Margin: 47.4% (new record); Operating Margin: 

28.8% (well above guidance); [and] EPS [earnings per share]: $1.53 (well above 

guidance).” (emphasis in original). 

89. Westbrook also created an auto-forwarding rule in Executive-5’s 

Outlook designed to send all of Executive-5’s emails after the rule was set up to an 

anonymous email account, Harris.Slama—the same anonymous email account that 

Westbrook used to receive auto-forwarded emails in the hack of Company-2. The 

auto-forwarding rule was unsuccessful, however, because Company-5’s computer 

systems had been configured to prohibit email auto-forwarding for all users.  

90. Westbrook purchased Company-5’s securities based on information 

he deceptively obtained and knew or recklessly disregarded was material and 

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nonpublic regarding Company-5’s financial results.  

91. Starting on February 3, 2020, at approximately 10:14am EST—less 

than two hours after the hack described above—Westbrook began purchasing 

Company-5 call options. Between the time of the hack and Company-5’s 

scheduled earnings announcement the next morning, Westbrook purchased 1,917 

Company-5 call options across nine different option series, the majority of which 

were out-of-the-money. Specifically, Westbrook purchased the following 

Company-5 call options for a total cost of approximately $492,802: 

Call Options Purchased Expiration Date Strike Price 

100 2/14/20 $80 

500 2/14/20 $82 

135 2/14/20 $85 

361 2/28/20 $85 

150 2/28/20 $90 

170 3/20/20 $75 

240 3/20/20 $77.50 

200 3/20/20 $80 

61 3/20/20 $85 

  

92. On February 4, 2020, at 7:30am EST, Company-5 reported its 

financial results for the second quarter of its fiscal year 2020. Those results 

reflected material information about Company-5’s earnings that was included in 

the drafts to which Westbrook gained access the day before when he hacked into 

Company-5’s computer system, including revenue of $457.8 million, gross margin 

of 47.4%, operating margin of 28.8%, and earnings per diluted share of $1.53.   

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93. Company-5’s earnings announcement exceeded the consensus 

expectations of securities market analysts, who had predicted that Company-5 

would report adjusted earnings per share of $1.29.  

94. By the close of regular market trading that day, Company-5’s stock 

price increased 12%—from a closing price of $77.22 on February 3, 2020 to a 

closing price of $86.52 on February 4, 2020. 

95. On February 4, 2020 at 9:31am EST—less than two hours after 

Company-5 reported its financial results—Westbrook began selling his Company-

5 call options. By the close of regular market trading that day, Westbrook obtained 

a total realized and unrealized profit of $217,535 from his trading of Company-5 

securities in connection with this earnings announcement.  

96. The options positions Westbrook established in Company-5 prior to 

this earnings announcement were large and risky. Westbrook’s purchases of 

Company-5 call options accounted for approximately 25% of all Company-5 call 

options traded on February 3, 2020. In fact, going into the earnings announcement 

on February 4, 2020, Westbrook owned more Company-5 call options than any 

other market participant. 

III. Summary of Westbrook’s Profits from Trading in the Hacked Companies 

97. Westbrook’s participation in this scheme was highly lucrative. 

Westbrook obtained approximately $3.75 million in illicit profits by trading in the 

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securities of the Hacked Companies prior to the release of at least 14 earnings 

announcements while he knew, or recklessly disregarded, that the information he 

deceptively obtained from the Hacked Companies was material and nonpublic.  

98. The following table summarizes Westbrook’s trading in connection 

with those 14 earnings announcements: 

Issuer and 

Date of 

Earnings 

Announce

ment 

Pre-

Announcement 

Closing Equity 

Price 

Post-

Announcement 

Closing Equity 

Price 

Equity 

Price % 

Change 

Profit Return 

Company-1 

1/30/2019 

$38.13 $27.67 -27.43% $322,781 249% 

Company-3 

3/6/2019 

$86.46 $90.22 4.35% $236,492 48% 

Company-2 

5/8/2019 

$19.49 $17.05 -12.52% $40,679 24% 

Company-3 

6/4/2019 

$98.10 $95.15 -3.01% $146,667 21% 

Company-2 

8/8/2019 

$11.05 $9.98 -9.68% $25,673 1% 

Company-3 

9/5/2019 

$95.41 $109.41 14.67% -$149,285 -49% 

Company-4 

10/30/2019 

$94.84 $117.93 24.35% $1,398,436 538% 

Company-2 

11/6/2019 

$15.71 $18.47 17.57% -$144,724 -58% 

Company-3 

12/5/2019 

$119.33 $110.77 -7.17% -$39,629 -1% 

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Issuer and 

Date of 

Earnings 

Announce

ment 

Pre-

Announcement 

Closing Equity 

Price 

Post-

Announcement 

Closing Equity 

Price 

Equity 

Price % 

Change 

Profit Return 

Company-5  

2/4/2020 

$77.22 $86.52 12.04% $217,535 44% 

Company-2 

2/26/2020 

$11.94 $12.07 1.09% $14,639 74% 

Company-3 

3/4/2020 

$112.48 $93.56 -16.82% $1,038,855 132% 

Company-2  

5/6/2020 

$6.19 $8.03 29.73% $310,485 39% 

Company-2 

7/29/2020 

$12.28 $12.32 0.33% -$4,279 -18% 

 

Total 

Profits 

(Excluding 

Losses) 

   $3,752,242 91% 

 

IV.  Westbrook Hacked into the Hacked Companies 

99. Forensic data, blockchain data, and other data establish that 

Westbrook hacked into the Hacked Companies to obtain their nonpublic earnings 

information. 

100. Westbrook’s payment to and use of a VPN service provider (“VPN 

Service Provider-1”) identifies Westbrook as the person who hacked into the 

Hacked Companies.  

a. On October 22, 2019, Westbrook, through a Bitcoin wallet he 

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controlled, sent a Bitcoin payment equal to approximately 

$36.93 to VPN Service Provider-1 for a yearly subscription for 

its VPN services.  

b. A subsequent email sent to one of the anonymous email 

accounts—Aleksandrdubois, which was used in the hacking of 

Company-1 and Company-4—confirmed that a yearly 

subscription to VPN Service Provider-1’s VPN service 

commenced approximately twenty seconds after Westbrook 

sent that Bitcoin payment to VPN Service Provider-1.  

c. That same day, VPN Service Provider-1’s VPN service was 

used from the same IP address to sign into (i) one of the 

anonymous email accounts (Harris.Slama) that was used in the 

hacking of Company-2 and Company-5 and (ii) an email 

account (LoraineRanos796[@]aol.com) (“LoraineRanos”) that 

was the recovery email account for two of the anonymous email 

accounts (Aleksandrdubois and Barnesbainesbjorn) used in the 

hacking of the Hacked Companies.  

d. The next morning, VPN Service Provider-1’s VPN service was 

used in the hack into Company-4’s computer system described 

above.  

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e. About two days later, on October 25, Westbrook began 

purchasing call options in Company-4 in advance of its 

earnings announcement.  

101. Moreover, Westbrook engaged in other conduct that further 

establishes him as the hacker in this hack-to-trade scheme.  

a. During the Relevant Period, Westbrook used several VPN 

services. Each of the hacks discussed above took place using 

VPN services to which Westbrook subscribed. For example, on 

or about December 24, 2018, Westbrook purchased a yearly 

subscription to another VPN service provider (“VPN Service 

Provider-2”). The next month, an IP address attributed to VPN 

Service Provider-2 was used to access the Harris.Slama email 

account and the LoraineRanos email account. And during the 

Relevant Period, Westbrook had an active subscription to a 

third VPN service provider (“VPN Service Provider-3”). IP 

addresses attributed to VPN Service Provider-3 were used in 

the hacking of Company-5. IP addresses attributed to VPN 

Service Provider-3 were also used to access the 

Barnesbainesbjorn account, which was used in the hacking of 

Company-3. 

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b. During the Relevant Period, Westbrook made payments to an 

online directory service provider and an online genealogy 

company. Both of those companies provide personal and family 

information that could be used to guess the answers to the 

security questions that employees at the Hacked Companies 

may have used to reset their passwords. 

c. Westbrook subscribed to at least five CAPTCHA6 solving 

services. The self-service password reset portal software used 

by four of the five Hacked Companies allowed the companies 

to require CAPTCHA verification. CAPTCHA solving services 

would have helped Westbrook bypass verification requirements 

in his efforts to reset the passwords of the Hacked Companies’ 

senior executives.  

d. Westbrook purchased at least five highly technical hacker 

manuals, including “The Hacker Playbook 3: Practical Guide to 

Penetration Testing” and “Tribe of Hackers: Cybersecurity 

Advice from the Best Hackers in the World.” 

 
6 CAPTCHA is a type of security measure known as a challenge-response 

authentication. It helps protect an account holder from password decryption by 

completing a basic test that proves the account holder is human and not a computer 

trying to break into a password protected account. 

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e. Westbrook opened over 50 email accounts, including 

anonymous email accounts hosted by overseas service 

providers known to be unreachable by law enforcement. 

f. Westbrook purchased a vulnerability scanner, which is a 

software tool designed to permit a user to test and exploit the 

security of web applications.  

g. Westbrook received email communications from online 

platforms known to sell hacking applications. 

102. Finally, Westbrook previously admitted that he possessed the 

knowledge and technical computing skill to engage in acts akin to hacking. While 

employed at a financial firm, Westbrook accessed and downloaded an entire 

database from a third-party vendor—at a time when Westbrook and his colleagues 

were not expected to access the database. When an internal investigation at the 

financial firm revealed that Westbrook had downloaded the database, he admitted 

that he wrote a computer script that enabled him to download all the data on the 

database overnight. 

V. Westbrook’s State of Mind and Efforts to Conceal His Conduct 

103. At all times relevant to this Complaint, Westbrook acted knowingly 

and/or recklessly in carrying out this scheme. He intended to hack into the 

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computer systems of the five Hacked Companies for the purpose of obtaining 

material nonpublic information.  

104. Westbrook traded profitably in the securities of the Hacked 

Companies using the material nonpublic information he deceptively obtained, and 

he knew or recklessly disregarded that this information was material and 

nonpublic.  

105. Westbrook repeatedly established large options positions in the 

Hacked Companies shortly before they were set to make their public earnings 

announcements. And those options positions were often out-of-the-money and/or 

were set to expire in the near term—increasing the risk that those options would 

expire worthless.  

106. In addition, Westbrook sought to conceal his conduct from detection 

in a variety of ways. This included:  

a. Using computer technology (such as VPN services) to hide his 

location;  

b. Using affirmative misrepresentations to pose as others in order 

to access the computer systems of the Hacked Companies;  

c. Deploying anonymous email accounts;  

d. Deleting emails in a senior executive’s account to cover up his 

hacking in Company-4.  

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107. Moreover, Westbrook received emails from a company that sells 

software to wipe evidence from devices. Those emails indicated that 

Westbrook had previously purchased this software.  

108. This evidence shows that Westbrook acted with the requisite scienter 

when he executed this fraudulent scheme and took efforts to conceal his conduct. 

VI. Conclusion 

109. As detailed above, Westbrook executed a fraudulent hack-to-trade 

scheme. Westbrook deceptively obtained material nonpublic information from the 

Hacked Companies’ computer systems and then used that information to trade 

profitably in the securities of the Hacked Companies in advance of their earnings 

announcements. 

110. In perpetuating that fraudulent scheme, Westbrook made material 

misrepresentations, affirmatively misrepresented himself and his identity, and 

employed a variety of deceptive and fraudulent devices, contrivances, artifices, 

practices, means, and acts in order to access the computer systems of five Hacked 

Companies and to obtain nonpublic information about the Hacked Companies’ 

earnings. 

111. Westbrook did so for the purpose of using that information to trade in 

the securities of the Hacked Companies. 

112. And Westbrook did just that. Based on deceptively-obtained 

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information that he knew or recklessly disregarded was material and nonpublic, 

Westbrook purchased the Hacked Companies’ securities and then sold them 

following the Hacked Companies’ earnings announcements, obtaining illicit profits 

of approximately $3.75 million.  

CLAIM FOR RELIEF 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

 

113. The Commission re-alleges and incorporates by reference here the 

allegations in paragraphs 1 through 112. 

114. By engaging in the conduct described above, the Defendant 

knowingly or recklessly, in connection with the purchase or sale of securities, 

directly or indirectly, by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange: 

a. employed devices, schemes, or artifices to defraud;  

b. made untrue statements of a material fact or omitted to state 

material facts necessary in order to make the statements made, in 

light of the circumstances under which they were made, not 

misleading; and/or 

c. engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon any person. 

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115. By engaging in the foregoing conduct, the Defendant violated, and 

unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a 

Final Judgment: 

I. 

Permanently restraining and enjoining Westbrook and his agents, servants, 

employees and attorneys and all persons in active concert or participation with any 

of them from violating, directly or indirectly, Section 10(b) of the Exchange Act 

[15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder [17 C.F.R. §§ 240.10b-5(b)].  

II. 

Ordering Westbrook to disgorge all illicit profits, avoided losses, or other ill-

gotten gains he received, directly or indirectly, with prejudgment interest thereon, 

as a result of the violations alleged in this Complaint, pursuant to Sections 

21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 

78u(d)(5), and 78u(d)(7)]. 

III. 

Ordering Westbrook to pay a civil penalty pursuant to Section 21A of the 

Exchange Act [15 U.S.C. § 78u-1] or, alternatively, to pay a civil penalty under 

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Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].  

IV. 

Granting any other and further relief this Court may deem just, equitable, or 

necessary. 

JURY DEMAND 

 The Commission demands a trial by jury.  

Dated: New York, New York 
September 27, 2024 
 

/s/ Russell J. Feldman     

Joseph G. Sansone 

Jorge Tenreiro 

Alison R. Levine 

Russell J. Feldman 

Karolina Klyuchnikova 

U.S. Securities and Exchange Commission 

New York Regional Office 

100 Pearl Street  

Suite 20-100 

New York, NY 10004-2616 

212-336-9144 (Feldman) 

[email protected]  

 

Attorneys for Plaintiff  

Securities and Exchange Commission 

  

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UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
ROBERT B. WESTBROOK,    

  
                                             Defendant. 
 
 

 
 

  
Civil Action No. 
 
DESIGNATION OF 

AGENT FOR SERVICE 

  

           

          

 

 Pursuant to Local Rule 101.1(f), because the Securities and Exchange 

Commission (the “Commission”) does not have an office in this district, the United 

States Attorney for the District of New Jersey is hereby designated as eligible as an 

alternative to the Commission to receive service of all notices or papers in the 

captioned action.  

Case 2:24-cv-09497     Document 1     Filed 09/27/24     Page 44 of 45 PageID: 44



45 

 

Therefore, service upon the United States or its authorized designee, David 

Dauenheimer, Deputy Chief, Health Care Fraud Unit, United States Attorney’s 

Office for the District of New Jersey, 970 Broad Street, Suite 700, Newark, NJ 

07102, shall constitute service upon the Commission for purposes of this action.  

      

Respectfully submitted, 

 

/s/ Russell J. Feldman     

Joseph G. Sansone 

Jorge G. Tenreiro 

Alison R. Levine 

Russell J. Feldman 

Karolina Klyuchnikova 

U.S. Securities and Exchange Commission 

New York Regional Office 

100 Pearl Street  

Suite 20-100 

New York, NY 10004-2616 

212-336-9144 (Feldman) 

[email protected]  

 

Attorneys for Plaintiff  

Securities and Exchange Commission 

 

Case 2:24-cv-09497     Document 1     Filed 09/27/24     Page 45 of 45 PageID: 45



JS 44   (Rev. 04/21) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as 
provided by local rules of court.  This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the 
purpose of initiating the civil docket sheet.    (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS

(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)

NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF 
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff 
and One Box for Defendant) (For Diversity Cases Only)

1 U.S. Government 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4

of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6
Foreign Country

IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions.
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES

110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury  - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC 
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust

& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 835 Patent - Abbreviated 460 Deportation

Student Loans 340 Marine Injury Product New Drug Application 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability 840 Trademark Corrupt Organizations

153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR 880 Defend Trade Secrets 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692)

160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending Act 485 Telephone Consumer
190 Other Contract Product Liability 380 Other Personal 720 Labor/Management SOCIAL SECURITY Protection Act
195 Contract Product Liability 360 Other Personal Property Damage Relations 861 HIA (1395ff) 490 Cable/Sat TV
196 Franchise Injury 385 Property Damage 740 Railway Labor Act 862 Black Lung (923) 850 Securities/Commodities/

362 Personal Injury - Product Liability 751 Family and Medical 863 DIWC/DIWW (405(g)) Exchange
Medical Malpractice Leave Act 864 SSID Title XVI 890 Other Statutory Actions

REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 790 Other Labor Litigation 865 RSI (405(g)) 891 Agricultural Acts
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: 791 Employee Retirement 893 Environmental Matters
220 Foreclosure 441 Voting 463 Alien Detainee Income Security Act FEDERAL TAX SUITS 895 Freedom of Information
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 870 Taxes (U.S. Plaintiff Act
240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration
245 Tort Product Liability Accommodations 530 General 871 IRS—Third Party 899 Administrative Procedure
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION Act/Review or Appeal of

Employment Other: 462 Naturalization Application Agency Decision
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration 950 Constitutionality of

Other 550 Civil Rights Actions State Statutes
448 Education 555 Prison Condition

560 Civil Detainee -
Conditions of 
Confinement

V. ORIGIN (Place an “X” in One Box Only)
1 Original

Proceeding 
2 Removed from

State Court
3 Remanded from

Appellate Court 
4 Reinstated or

Reopened
5 Transferred from

Another District
(specify)

6 Multidistrict
Litigation - 
Transfer

8  Multidistrict
Litigation -
Direct File

VI. CAUSE OF ACTION
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):

Brief description of cause:

VII. REQUESTED IN
COMPLAINT:

CHECK IF THIS IS A CLASS ACTION
UNDER RULE 23, F.R.Cv.P. 

DEMAND $ CHECK YES only if demanded in complaint:
JURY DEMAND: Yes No

VIII. RELATED CASE(S)
IF ANY (See instructions):

JUDGE DOCKET NUMBER

DATE SIGNATURE OF ATTORNEY OF RECORD

FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

26 USC 7609

INTELLECTUAL

Securities and Exchange Commission Robert B. Westbrook

Joseph G. Sansone, Jorge G. Tenreiro, Alison R. Levine, Russell J. Feldman, and Karolina Klyuchnikova 
Securities and Exchange Commission
100 Pearl Street, Suite 20-100
New York, NY 10004-2616 (212) 336-1100

United Kingdom

X

15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5

09/27/2024

Securities fraud

Case 2:24-cv-09497     Document 1-1     Filed 09/27/24     Page 1 of 1 PageID: 46