You are here

Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

FOR IMMEDIATE RELEASE
Friday, January 10, 2020

Stock Promoter Pleads Guilty to Accepting Kickbacks from CEO of Public Company

Earlier today, in federal court in Brooklyn, Jeffrey Auerbach, a former registered representative for various broker-dealers, pled guilty to conspiracy to commit securities fraud for his role in a scheme to take kickbacks from the former Chief Executive Officer (CEO) of NXT-ID, a publicly listed company on NASDAQ, in exchange for promoting NXT-ID stock to investors and potential investors.  Today’s plea proceeding took place before United States District Judge Pamela K. Chen.  When sentenced, Auerbach faces up to five years in prison, as well as forfeiture and a fine of up to $250,000.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea. 

“Auerbach exploited his position as a former registered representative for broker-dealers to enrich himself to the detriment of investors,” stated United States Attorney Donoghue.  “We will continue to investigate and prosecute stock promoters, brokers and others in the securities industry who exploit the trust of investors and distort the public markets.”  Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance.

According to court filings and facts presented during the plea proceeding, between July 2014 and September 2015, Auerbach conspired with others to defraud investors and potential investors in NXT-ID, a company that purported to provide a comprehensive platform of technology products and services that enable the Internet of Things (“IoT”).  As part of this scheme, Auerbach allegedly accepted secret payments from the CEO of NXT-ID in exchange for promoting NXT-ID stock to investors, and making payments to a broker to purchase shares of NXT-ID stock in the accounts of the broker’s clients.  

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorneys Mark Bini and Hiral Mehta are in charge of the prosecution.

The Defendant:

Jeffrey Auerbach
Age:  49
New York, New York

E.D.N.Y. Docket No. 19-CR-607 (PKC)

Topic(s): 
Financial Fraud
Securities, Commodities, & Investment Fraud
Contact: 
John Marzulli United States Attorney’s Office (718) 254-6323
Updated January 10, 2020