SEC v. Richard Brown, No. LR-26170, Eastern District of New York (Nov. 18, 2024) — Press Release
raw: Auerbach et al.
Auerbach et al., No. 1:19-cv-5631 (E.D.N.Y. Nov. 18, 2024)
Former stockbroker Richard Brown received a final judgment for accepting cash kickbacks to purchase $750,000 in Nxt-ID, Inc. stock for his clients without disclosure.
Richard Brown was charged with violating antifraud provisions of the Securities Exchange Act for accepting bribes to purchase over $750,000 of Nxt-ID, Inc. common stock. The SEC obtained a final judgment against him, requiring the disgorgement of $10,000 in ill-gotten gains plus interest. Brown also received a permanent bar from participating in any penny stock offerings.
Between July 2014 and October 2015, registered stockbroker Richard Brown accepted cash bribes from the CEO of Nxt-ID, Inc. and another defendant. These kickbacks were intended to influence Brown to purchase more than $750,000 worth of Nxt-ID, Inc. common stock in his customers' accounts. Brown failed to disclose these payments to his clients, leading to an SEC enforcement action. To resolve the matter, Brown consented to a final judgment without admitting or denying the allegations. The judgment includes a permanent injunction against violating Section 10(b) of the Securities Exchange Act and Rule 10b-5. Additionally, he was permanently barred from penny stock participation and ordered to disgorge $10,000 plus prejudgment interest.
Exhibits & Attached Documents (1)
Extracted insights
- $750K $750,000 $100K–$1M
- $10K $10,000 $10K–$100K
- person richard brown
- agency Securities and Exchange Commission
- Securities And Exchange Commission obtained a final judgment defendant Richard Brown for accepting kickbacks in an alleged scheme to defraud investors
- Richard Brown accepted cash bribes from the CEO of Nxt-ID, Inc. and another defendant to purchase more than $750,000 worth of Nxt-ID, Inc. common stock in his customers' accounts
- Richard Brown made purchases without informing his customers that he was receiving kickbacks in connection with the purchases
- Richard Brown consented to the entry of a final judgment permanently enjoining him from violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
- Richard Brown was barred from participating in an offering of penny stock
- Richard Brown was ordered to disgorge $10,000 in ill-gotten gains and prejudgment interest thereon
- Securities And Exchange Commission filed a complaint in the Eastern District of New York on October 4, 2019
- Litigation was led by Mary Kay Dunning and Lindsay S. Moilanen
- Litigation was supervised by Tejal D. Shah and Preethi Krishnamurthy
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26170 / November 18, 2024 Securities and Exchange Commission v. Auerbach et al., No. 1:19-cv-5631 (E.D.N.Y. filed Oct. 4, 2019) SEC Obtains Final Judgment Against Defendant for Receiving Kickbacks in Bribery Scheme On November 15, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Richard Brown for accepting kickbacks in an alleged scheme to defraud investors. The SEC’s complaint, filed in the Eastern District of New York on October 4, 2019, alleged that from approximately July 2014 through October 2015, Brown, then a registered stockbroker, accepted cash bribes from the CEO of Nxt-ID, Inc. and another defendant to purchase more than $750,000 worth of Nxt-ID, Inc. common stock in his customers’ accounts. Brown allegedly made the purchases without informing his customers that he was receiving kickbacks in connection with the purchases. Without admitting or denying the SEC’s allegations, Brown consented to the entry of a final judgment permanently enjoining him from violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, permanently barring him from participating in an offering of penny stock, and ordering disgorgement of $10,000 in ill-gotten gains and prejudgment interest thereon. The litigation was led by Mary Kay Dunning and Lindsay S. Moilanen and supervised by Tejal D. Shah and Preethi Krishnamurthy.
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26170 / November 18, 2024 Securities and Exchange Commission v. Auerbach et al., No. 1:19-cv-5631 (E.D.N.Y. filed Oct. 4, 2019) SEC Obtains Final Judgment Against Defendant for Receiving Kickbacks in Bribery Scheme On November 15, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Richard Brown for accepting kickbacks in an alleged scheme to defraud investors. The SEC’s complaint, filed in the Eastern District of New York on October 4, 2019, alleged that from approximately July 2014 through October 2015, Brown, then a registered stockbroker, accepted cash bribes from the CEO of Nxt-ID, Inc. and another defendant to purchase more than $750,000 worth of Nxt-ID, Inc. common stock in his customers’ accounts. Brown allegedly made the purchases without informing his customers that he was receiving kickbacks in connection with the purchases. Without admitting or denying the SEC’s allegations, Brown consented to the entry of a final judgment permanently enjoining him from violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, permanently barring him from participating in an offering of penny stock, and ordering disgorgement of $10,000 in ill-gotten gains and prejudgment interest thereon. The litigation was led by Mary Kay Dunning and Lindsay S. Moilanen and supervised by Tejal D. Shah and Preethi Krishnamurthy.