U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26018 / June 7, 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 Role in Bribery Scheme

On June 7, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Jared Mitchell, whom the SEC previously charged for his role in an illegal kickback scheme to defraud investors whose broker purchased technology company shares in their accounts without informing them that he was receiving kickbacks in connection with the purchases.

The SEC’s complaint, filed on October 4, 2019, alleged that from approximately July 2014 through October 2015, Mitchell entered into “consulting agreements” with the CEO of Nxt-ID, Inc., a publicly traded security technology company. According to the complaint these agreements were actually a guise to funnel cash bribes from the CEO to a third defendant, a registered stockbroker, to buy Nxt-ID stock in customers’ accounts. Allegedly, Mitchell was paid for his part in arranging kickbacks to the stockbroker.

Without admitting or denying the SEC’s allegations, Mitchell consented to 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, barring him from participating in an offering of penny stock, and ordering disgorgement of $3,000 in ill-gotten gains and prejudgment interest thereon. The litigation is being led by Lindsay S. Moilanen and Mary Kay Dunning and supervised by Tejal D. Shah and Preethi Krishnamurthy. 

Final Judgment - Jared Mitchell