The securities attorneys of Gana Weinstein LLP are investigating potential recovery options for investors of Samuel DelPresto (DelPresto) who suffered investment losses as a result of fraud. Recently, the Securities and Exchange Commission (SEC) filed an amended complaint. The SEC’s complaint, charged DelPresto, MLF Group, LLC (MLF), and Donald Toomer, Jr. (Toomer) with allegations of engaging in a series of fraudulent schemes designed to manipulate the market price of and demand for the stocks of BioNeutral Group, Inc. (BONU); NXT Nutritionals Holdings, Inc. (NXTH); Mesa Energy Holdings, Inc, (MSEH); and ClearLite Holdings, Inc. (CLRH). The fraudulent schemes allegedly generated profits of approximately $13 million for DelPresto.
The SEC alleged that each scheme followed a similar pattern whereby DelPresto and a business partner identified only as “Individual A” used a private company in need of financing to orchestrate a reverse merger of it and a shell company that DelPresto and Individual A controlled. Once the reverse merger was consummated, the SEC alleged that DelPresto and Individual A engaged in manipulative trading, paid for promotional campaigns, and otherwise engineered an attractive and rising stock price. The SEC alleged that once the stock price reached high levels then DelPresto and Individual A sold their stock at the expense of investors.
In order to carry out their scheme, the SEC alleged that DelPresto, Individual A, and others deposited shares in brokerage accounts with a registered broker referred to as the “Trader”. The SEC found that the Trader, DelPresto, Individual A, and others then engaged in a pattern of matched trading between and amongst brokerage accounts that they controlled.
Another person DelPresto and Individual A recruited according to the SEC was Toomer, an investment adviser, who upon information and belief was employed by Wells Fargo Advisors Financial Network, LLC. According to the SEC, Toomer would buy the stock of NXTH, MSEH, and CLRH in his clients’ portfolios in exchange for receiving kickbacks of up to 10 percent of the total shares he had his clients buy. The SEC found that Toomer’s purchases in his clients’ accounts contributed to the rising stock price and gave the false appearance of market demand for the securities.
In addition to the SEC’s allegations, according to news sources, Toomer received a federal grand jury criminal indictment for allegedly participating in a $30 million “pump and dump” scheme. According to the indictment, Toomer allegedly told his customers that he had done independent research on the firms and but he failed to tell them he was receiving cash kickbacks to promote the stocks. According to the charges, Toomer faces up to 45 years in prison and over $10 million in fines.
The attorneys at Gana Weinstein LLP are experienced in representing investors in cases where brokers help facilitate securities frauds on investors and brokerage firms failure to supervise their representatives. Investors who have suffered losses may be able recover their losses through securities arbitration. Our consultations are free of charge and the firm is only compensated if you recover.