November 19, 2024
On November 15, 2024, the Securities and Exchange Commission (SEC) announced it had obtained a final judgment against Richard Brown, a former registered stockbroker, for his role in a bribery and kickback scheme involving Nxt-ID, Inc.
According to the SEC’s complaint, filed in the Eastern District of New York in October 2019, Brown received cash bribes from the CEO of Nxt-ID, Inc. and another defendant between July 2014 and October 2015. These payments were allegedly part of a scheme to defraud investors by using Brown’s customers’ accounts to purchase over $750,000 worth of Nxt-ID, Inc. common stock without disclosing his financial incentives.
The SEC alleged that Brown’s actions violated the antifraud provisions of federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The purchases, made without the knowledge or consent of his customers, placed investor assets at risk while enriching Brown through undisclosed kickbacks.
Without admitting or denying the allegations, Brown consented to the terms of the final judgment. He has been permanently enjoined from further violations of the antifraud provisions, prohibited from participating in penny stock offerings, and ordered to disgorge $10,000 in ill-gotten gains, plus prejudgment interest.
The SEC’s litigation was led by attorneys Mary Kay Dunning and Lindsay S. Moilanen, under the supervision of Tejal D. Shah and Preethi Krishnamurthy.
If you or someone you know invested through Richard Brown or in Nxt-ID, Inc. during the relevant time period, you may have been affected by this scheme. At ChapmanAlbin, we specialize in helping investors recover losses caused by fraud and misconduct. Contact us today to discuss your case and explore your options.
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