SEC bars former Ameritas adviser after fraud trial finds him guilty

Responding to a jury that found Sheik F. Khan guilty of securities and investment adviser fraud, the Securities and Exchange Commission has barred the former Ameritas adviser from the securities industry. (More: DOL fiduciary rule takes effect, but more uncertainty lies ahead) In an order explaining its action, the SEC said that Mr. Khan, of Pasadena, Calif., was found guilty of falsely telling prospective investors that their investments in private offerings of VGTel Inc. would benefit from prospective reverse-mergers between the company and private companies even though no merger would ever be consummated. He also was found guilty of scheming to control and manipulate the publicly traded price of VGTel stock and scheming to induce investors to invest in private shares of the stock through false and misleading statements. VGTel is a Suffern, N.Y.-based company that trades on the over-the-counter market. (More: Supreme Court curbs SEC's power to recoup illegal profits) Mr. Khan, also known as Abida Khan, was registered with Ameritas Investment Corp. between May 2002 and December 2013. In January 2016, Mr. Khan was arrested in Las Vegas and charged with conspiracy, securities fraud, wire fraud, and investment adviser fraud by the U.S. Attorney's Office for the Southern District of New York. Of the approximately $15 million invested in the fraudulent scheme devised by Mr. Khan and others, more than $9 million was funneled to the defendants and other co-conspirators, the U.S. Attorney's Office said at the time. (More: SEC reasserts itself on investment-advice standards, but it's not clear whether it will overtake DOL fiduciary rule)