SEC Charges London Man with Hacking Five Public Companies to Trade on Inside Information

SEC Charges U.K. Citizen in Hacking and Trading Scheme Involving Five U.S. Public Companies

The Securities and Exchange Commission today announced charges against U.K. citizen Robert B. Westbrook for hacking into the computer systems of five U.S. public companies to obtain material nonpublic information about their corporate earnings and using that information to make approximately $3.75 million in illicit profits by trading in advance of the companies’ public earnings announcements.

The SEC’s complaint, filed on September 27, 2024 in the U.S. District Court for the District of New Jersey, alleges that, between approximately January 2019 and August 2020, Westbrook gained unauthorized access into the public companies’ computer systems—prior to the companies’ earnings announcements—by resetting passwords of senior level executives’ accounts. As a result of these hacks, Westbrook deceptively obtained material nonpublic information that he used to trade in the securities of the five public companies prior to the release of at least 14 earnings announcements.

SEC Charges Entities Operating Crypto Asset Trading Platform Mango Markets for Unregistered Offers and Sales of the Platform’s “MNGO” Governance Tokens

The Securities and Exchange Commission today filed settled charges against Mango DAO and Blockworks Foundation for engaging in the unregistered offer and sale of crypto assets called “MNGO” tokens. The SEC also settled charges against Blockworks Foundation and Mango Labs LLC for engaging in unregistered broker activity in connection with various crypto assets being offered and sold as securities on the Mango Markets platform. The SEC’s complaint alleges that by skirting the SEC’s registration provisions, Mango DAO, Blockworks Foundation, and Mango Labs deprived investors of critical protections afforded by the federal securities laws.

According to the SEC’s complaint, starting in August 2021, Mango DAO, a purportedly decentralized autonomous organization, or DAO, and Blockworks Foundation, a Panamanian entity, raised more than $70 million from unregistered offers and sales of MNGO tokens, the so-called governance tokens of the Mango Markets platform, to hundreds of investors worldwide, including in the U.S. The SEC also alleges that, since at least August 2021, Blockworks Foundation and Mango Labs each operated as an unregistered broker by actively soliciting and recruiting users of Mango Markets to trade securities; providing advice and valuations as to the merits of an investment in securities; and helping to facilitate securities transactions on the Mango Markets platform by assisting customers in opening accounts and regularly handling customer funds and securities.

SolarWinds security chief calls for tighter cyber laws

Tim Brown, chief information security officer at SolarWinds, faced a landmark lawsuit that accused him and the company of misleading investors by not disclosing “known risks” and inaccurately representing the company’s security measures.

Speaking to the Financial Times in his first interview since the complaint was largely thrown out by a federal court in July, Brown warned that global cyber regulations are still “in flux”, which “absolutely adds stress across the globe” on cyber chiefs.

“When you don’t have rules to follow, it’s very hard to follow them,” said Brown. “Very few security people would ever do something that wasn’t right, but you just have to tell us what’s right in order to do it,” he added.

Convicted Corporate Raider, His Longtime Accountant, and Vaping Company Charged in Indictment Alleging Conspiracy and Fraud

A corporate takeover specialist and convicted felon has been indicted on federal charges for his alleged years-long avoidance of a judgment – now exceeding $180 million – to the U.S. Securities and Exchange Commission (SEC) while running a cannabis and lifestyle brand company purportedly helmed by his social media influencer son – a company whose investors he allegedly cheated, the Justice Department announced today.

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According to the indictment, the SEC in 1989 brought a civil action against Bilzerian based on the same securities violations that led to his criminal conviction in the Southern District of New York, for which defendant was sentenced to four years in prison. In 1993, the SEC obtained civil judgments totaling approximately $62,337,600 against Bilzerian. Since then, Bilzerian has evaded enforcement of the judgments. In 2000, a federal court found Bilzerian in contempt of the SEC judgments and appointed a receiver to collect his assets to satisfy them. The SEC has only recovered approximately $547,000 toward satisfaction of the judgments, which now – with interest – exceed $180 million.

From December 2018 to September 2024, Bilzerian, Rohleder, and Ignite allegedly conspired to impede the SEC from collecting on the judgments….

The farce that is America’s ‘crypto election’

But reader, I must level with you right off the BAT (a digital token): the crypto voter is not, in any substantive sense, real. Aside from the small group of men (OK, mainly men) whose livelihoods now depend on this digitally indigenous fluff, most Americans have rather bigger things to worry about — food prices, healthcare, the jobs market, or the general state of their nation, maybe.

The idea, therefore, that there is a “constituency” of crypto voters needing to be pandered to, whose top issue is making sure that exchanges and other companies aren’t too heavily regulated, is fanciful. And yet that is the narrative being pushed by the industry, along with some creatively interpreted statistics.

The SEC’s September Enforcement Actions

Every September, the SEC really ramps up its enforcement actions to coincide with the end of the fiscal year, which is Monday. Pretty much every day, there’s a few announcements in my inbox. So I decided to go back and look at the numbers and they’re pretty shocking. So far this September (there’s the rest of today and Monday still left), there have been a whopping 200 enforcement actions by the SEC. That’s more than 5 times the number of enforcement actions there were last year! I haven’t looked through all of those enforcement actions — did I mention there were 200 in just the past month? — but it would be interesting to see if AI could detect some trends with this.