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CoSmismgrFlag for United States of America

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Emergency - email virus issue

One of my users started receiving hundreds of emails with failed delivery reports of an email he never sent himself - it contains a zip file attachment, and inside the zip file is an executable, definitely bogus.

How do I make sure this is terminated? He changed his password immediately. It is odd that nothing shows up in his sent items folder either. I'm not sure how these types of email account hijacking viruses work, so am hoping for someone more knowledgeable to pipe in!

He is starting to receive all sorts of emails back from people notifying him of the spam email. I checked mail flow on my exchange server and can see all of the sent emails. How do I put a stop to this??
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CoSmismgr
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It appears no more of the emails have been sent since the password change.
Still would like to know what caused this, I cant be sure it wont happen again until I know
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Thanks guys, I am certain it was hacked credentials and am implementing a more secure password policy.
@CoSmismgr  - Thanks for the update and I was happy to help.