Update on VGTel Securities Fraud Investigation

Ex-Brokers Christopher Cervino & Larry Werbel to pay clients $845,000

According to the Financial Industry Regulatory Authority (FINRA), two ex-brokers involved in a securities fraud scheme last year have been ordered to pay $845,000 to two clients they allegedly defrauded.

Christopher Cervino and Larry Werbel were involved in a scheme to inflate shares of a penny stock company, VGTel, Inc. 100 investors were scammed for more than $15 million.

Last year, we told that Cervino was found guilty of securities fraud by a federal court in New York, and was recently sentenced to one year and one day in prison. Werbel has pleaded guilty to fraud charges and awaits sentencing.

The Financial Industry Regulatory Authority panel reportedly ordered the pair to pay James Mirgliotta and the estate of his late wife, Bette, $595,000 in compensatory damages and $250,000 in punitive damages.

According to his FINRA Broker Check, Cervino was registered with Primary Capital in New York, NY from 10/30/2014 – 01/07/2016 and prior to that he was registered with COR Clearing LLC in Edison, NJ from 08/07/2013 – 10/29/2014.

Cervino has 7 disclosures listed on his Broker Check report and he was permanently barred from the securities industry by FINRA in April 2016.

Larry Werbel was registered with Concorde Investment Services in Chagrin Falls, OH from 04/16/2015 – 01/09/2016, according to FINRA BrokerCheck Report. Prior to that, he was registered with Summit Brokerage Services from 06/12/2014 – 11/24/2014. He has 16 disclosures listed on his Broker report.

Failure to Supervise

The White Law Group continues to investigate potential claims on behalf of investors swindled in the VGTel scheme.

Brokerage firms are required to adequately supervise their advisors. They must ensure they are complying with FINRA rules.

When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

The brokerage firms can be held responsible for any losses in a FINRA arbitration claim if it is determined that they failed to properly supervise their agent.

If you suffered losses investing VGtel, the attorneys at The White Law Group may be able to help you recover your losses through FINRA Arbitration. For a free consultation with a securities attorney, please call (888) 637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information, please visit our website, www.whitesecuritieslaw.com.