Christopher Cervino and Sheik Khan Found Guilty of Pump and Dump Scheme

Have you lost money with financial advisors Christopher Cervino and Sheik Khan?  We are investigating allegations made by the US Attorneys Office for the Southern District of New York.  The US Attorney alleged that Larry Werbel, Christopher Cervino, and Sheik F. Khan of taking part of a scheme ran by Edward Durante.  It was alleged that from 2009 to 2015, Durante acted in concert with Werbel, Cervino, and Khan to defraud investors through the sale of stock in VGTel, Inc. (VGTL).

It was alleged that they misrepresented the risks of VGTel, and they failed to inform investors that Durante was previously convicted of securities fraud in 2001.  Larry Werbel, Christopher Cervino, and Khan were arrested January 6, 2016.  Cervino and Khan were found guilty in March 2017 for this conduct.  They now face sentencing hearings to determine how much prison time and fines they will receive.

Christopher Cervino was arrested in Franklin Lakes, New Jersey, and he faces counts of securities fraud, wire fraud, and money laundering.  He worked for Primary Capital from October 2014 to January 2016; with COR Clearing from August 2013 to October 2013; with Wilson-Davis & Co. from July 2012 to August 2013; with Delaney Equity Group from September 2011 to December 2011; and with GFI Securities from September 2010 to September 2010.  He worked at branch offices in New York City.

Sheik F. Khan was arrested in Las Vegas and faces charges of securities fraud, wire fraud, and investment adviser fraud.  She was a financial advisor with Ameritas Investment Corp. from 2002 to December 2013.  She was suspended by FINRA in November 2015.  She worked at a branch office in Murrieta, California.

Larry Werbel faces six charges, including securities fraud, wire fraud, and investment advisory fraud.  He was alleged to have received payoffs from Durante for promoting VGTel, which was essentially a shell company.   Larry Werbel was a financial advisor and registered representative of Summit Brokerage Services, Inc. from March 2011 to April 2014 and June 2014 to November 2014.  He worked at a branch office in Chargin Falls, Ohio.  He also was affiliated with Concorde Investment Services from April 2015 to January 2016, and with LPL Financial from February 2009 to February 2011.

Werbel was previously suspended from the securities industry for two months in 2014 and fined $12,500 for soliciting low-priced securities to investors.  Larry Werbel has two customer complaints on his record, alleging misrepresentations related to the sale of VGTel and Q Lotus Holdings, Inc.  Werbel also was affiliated with Evolution Partners Wealth Management.

Brokerage firms like Summit Brokerage Services, Ameritas Investment Corp. and COR Clearing have a responsibility to adequately supervise all representatives who are registered through their firm.  Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies.  When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.

Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado and the Seattle area.  We represent investors in FINRA arbitration proceedings in all 50 states, including investors in Ohio, California, and New York. Our attorneys have represented over one thousand investors against many brokerage firms in the past, including Ameritas.

Click to view:  Cervino BrokerCheck 1.14.16

Click to view:  Khan BrokerCheck 1.14.16

If you lost money with Larry Werbel, Sheik Khan, or Christopher Cervino, please CONTACT US at (720) 599-3505 for a free evaluation of your case.

Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency.  Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency.  All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact.  This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice.  Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis.  In contingent representation, clients may still be liable for costs.