A New York City based stock promoter and investor relations executive, Jeff Auerbach, was given a lite prison sentence for his role in bribing stock brokers to put their main street clients into microcap stocks to prop up the price of a stock. Auerbach chose to report early to Otisville, NY prison in March for a three month sentence. He was also charged by the Securities and Exchange Commission for his role in the scheme along with two others. The case involved only one stock, NXT-ID, which was surprising to people familiar with the investigation. That’s because whistleblowers who were interviewed by this reporter said the SEC had been given proof of at least 17 other allegedly illegal stock promotions Auerbach was the leader in from 2018-2019. Sixteen of those stocks were NASDAQ or NYSE listed.
Additionally, court documents show Jeff Auerbach was caught on an FBI wiretap in the investigation into pump and dump fraudster A.J. Discala for his role in working with Discala to run wash trades in Codesmart. Codesmart was a company named in the indictment against Discala and his crew of around a dozen co-conspirators. Wash trades are when two or more people agree to buy or sell stock together in a coordinated effort to influence the price of a stock or make it appear there is an active market in the stock. Auerbach was also mentioned as being a close work buddy with Discala in testimony by broker Matthew Bell during A.J.’s trial in 2018, which was attended by this reporter.
The prosecutor in the Auerbach case for the Eastern District of New York, Mark Bini, asked the judge for a sentencing of 18-24 months because he said Auerbach lied to FBI agents after he was arrested about the kickback to the broker being “just a loan”. Getting caught lying to a federal officer is considered obstruction of justice with up to a five year prison sentence. AUSA Bini also told the court that Auerbach was instrumental in the manipulation of Force Field Energy. Jared Mitchell, who worked for Auerbach, was arrested in the Force Field Energy case and got 36 months of jail time but for some reason the DOJ never named Auerbach as a defendant in the case.
Jeffrey Auerbach World Wide Holdings
Part of Auerbach’s defense to get a lite sentence was claiming Jared Mitchell, who is at least a decade younger, was the leader of the kickback scheme. The duo would approach CEO’s of small cap companies offering to help with investor relations and marketing of the stock. Then they allegedly got the CEO’s to send them some money or free trading stock and Jared or Jeff would use those funds to pay stock newsletter writers to write glowing financial analysis of a company while not disclosing the company was paying them. Stocker brokers were also paid in the scheme to put their clients into the stock even though it was likely an unsuitable investments for their risk level. According to two promoters interviewed by this reporter it was Auerbach who was in charge of the scheme not Jared Mitchell. Excelsior Global Advisors is the name of the company Mitchell and Auerbach formed.
I reached Auerbach by cell phone in 2020 after he had plead guilty and was awaiting sentencing. According to a tip by an active promoter who had previously worked with him, Jeff was still trying to work with public companies to pay for promotions. Auerbach denied the allegations when we spoke and demanded this reporter never call him again.
Court records show Auerbach had to ask the court to leave New York while out on bond. One request was for work in Chicago for a e-gamming company that is not currently public. The judge allowed Auerbach to do marketing work for the company because it wasn’t a public company. It’s unclear what kind of work restrictions Auerbach is under with the DOJ considering his SEC settlement in February 2020 didn’t included a penny stock ban. His felony conviction is for conspiracy to commit securities fraud. After he is released from prison Auerbach has to serve six months of home confinement and then three years of probation. His monetary fine was less than $200,000. Auerbach currently owns a $2 million dulpex on the Upper East Side of New York City located at First Ave and 88th street.
Jeff Auerbach worked with lots of people who have now been charged by the SEC or arrested by the DOJ. This includes pump and dump fraudster Barry C. Honig. Hoth Therapeutics is one of those companies Auerbach allegedly helped Honig promote. A review of investor newsletters show an undisclosed promotion for $HOTH ran from mid-May to mid-June in 2019. This is just months before Auerbach was arrested. Promoter Adam Garcia disclosed that World Wide Holdings, an llc controlled by Auerbach, had paid him to write about the stock but another promotion by Paul Lipp did not. Lipp runs multiple llc’s used for stock promotion, one is called Small Cap Specialist.
The SEC could have named $HOTH in their case against Auerbach but didn’t. Two executives at Laidlaw & Company are now running an alleged stock manipulation of Hoth given Honig agreed to a penny stock ban. I have previously reported on Matt Eitner and Jimmy Ahern’s role in working with Hoth CEO Robb Knie.
Knie had previously worked with Honig.
Barry Honig & Hoth executive Robb Knie
Why aren’t all these crooks sent to prison? Why doesn’t the SEC take away their licenses to never trade again? Why don’t they have to pay back huge penalties? I just don’t understand.