Former Ameritas Investment Corp. Financial Advisor Sheik Firdosh Khan Barred for Securities Fraud
Posted on Friday, June 23rd, 2017 at 3:51 pm
Erez Law is currently investigating former Ameritas Investment Corp. financial advisor Sheik Firdosh Khan (CRD# 2448117) regarding securities and investment fraud. Khan has been registered with Ameritas Investment Corp. in Murrieta, California from 2002 to 2013.
In June 2017, the SEC barred Khan alleging that he is guilty of securities and investment adviser fraud by, “falsely telling prospective investors that their investments in private offerings of VGTL would benefit from prospective reverse-mergers between VGTL and private companies even though no merger would ever be consummated, scheming to control and manipulate the publicly traded price of VGTL stock to inflate the price and increase the trading volume of VGTL stock, scheming to induce investors to invest in private shares of VGTL through false and misleading statements, and causing her clients to invest in VGTL, including clients who had not authorized such an investment, in exchange for receiving kickback payments that were not disclosed to those clients.”
According to the Securities and Exchange Commission, Edward Durante was charged with defrauding at least 50 unsophisticated investors in New England, Ohio and California of at least $11 million through the sale of securities of VGTel, Inc., a shell company he controlled. The SEC complaint alleges that Durante sold approximately six million shares of the VGTel stock using a false name, and Durante bribed Khan and others to encourage their clients to purchase VGTel stock without disclosing to the customers that they had been bribed. Additionally, “the recidivist securities law violator also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock’s market price.” Thus, Khan is liable for aiding and abetting securities violations.
Additionally, there are pending criminal charges against Khan, including:
- Attempt And Conspiracy To Commit Wire Fraud (Felony)
- Investment Advisor Fraud (Felony)
- Conspiracy To Commit Securities Fraud (Felony)
- Fraud By Wire, Radio, Or Television (Felony)
- Aggravated Identity Theft (Felony)
- Securities Fraud (Felony)
From November 2015 to March 2016, Khan was suspended from FINRA after consenting to the sanctions and to the entry of findings of failure to provide written notice of three outside business activities to Ameritas Investment Corp., according to the Acceptance, Waiver & Consent (AWC). The FINRA investigation found that Khan sold a list of firm customers to someone intending to move the customers to a different broker-dealer, and Khan sent a letter to Ameritas Investment Corp. customers with misleading and false statements regarding this transaction. Khan did not look into the background of the individual who negotiated and signed the purchase agreement, and Khan did not give prior written notice to Ameritas Investment Corp. and prevented the firm from evaluating the outside business activity. Later, Khan learned that Durante used a pseudonym to conceal his past and barred status with the SEC, which arose from stock manipulation in 2003.
Khan has been the subject of one customer complaint, according to the CRD report:
November 2016. “Claimants allege failure to supervise; breach of fiduciary duty; violation of FINRA Rule 2010; negligent warning; suitability obligations violation; fraud; violation of fair dealing with customers; negligent or fraudulent misrepresentations and omissions; violation of CA Consumer Legal Remedies Act, CA Business & Professional Code; and financial elder abuse.” The customer is seeking $3,915,277 in damages and the case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Ameritas Investment Corp. may be liable for investment or other losses suffered by Khan’s customers.
Erez Law represents investors in the United States for claims against former Ameritas Investment Corp. financial advisor Sheik Firdosh Khan regarding securities and investment fraud. If you were a client of former Ameritas Investment Corp. financial advisor Sheik Firdosh Khan or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.