SEC Orders New Jersey Man to Disgorge $12 Million in Market Manipulation SchemeWednesday, December 4, 2019
On September 17, 2019, a judge for the United States District Court for the District of New Jersey entered final judgments on consent against Samuel DelPresto, his entity MLF Group, LLC, and Donald Toomer, Jr., for their participation in a market manipulation scheme. DelPresto resides in Holmdel, New Jersey and Toomer resides in Las Vegas, Nevada and was a registered independent contractor with Wells Fargo Advisors Financial Network, LLC.
The judgement stems from an SEC complaint filed on December 15, 2015 alleging that DelPresto and Toomer acquired ownership of the vast majority of shares for the four stock issuers: BioNeutral Group, Inc. (BONU), NXT nutritionals Holdings, Inc. (NXTH), Mesa Energy Holdings, Inc. (MSEH), and Clear-Lite Holdings, Inc. (CLRH; collectively, the “Issuers”). According to the SEC complaint, the Issuers describe themselves as follows:
- BONU is a specialty chemical company engaged in development and commercialization of technology to neutralize environmental contaminants, toxins, and micro-organisms.
- NXTH is an alternative food and beverage development company engaged in the development of healthy alternative sweeteners.
- MSEH is an exploration stage oil and gas company.
- CLRH is a manufacturer of environmentally friendly lighting products.
DelPresto conducted a similar method for each scheme in which he identified a private company in need of financing and orchestrated a reverse merger of it and a public shell company whose unrestricted stock DelPresto and his business partner controlled directly or through accounts they controlled. DelPresto and his business partner then engaged in manipulative trading and paid for promotional campaigns which were designed to highlight a rising stock price. Once the stock price hit sufficiently high levels, DelPresto and his business partner sold their stock into the public market at investors’ expense.
To ensure the success of the scheme, DelPresto and his business partner deposited some of their unrestricted shares in brokerage accounts with a registered representative at a broker-dealer and began trading between and amongst brokerage accounts that they controlled. They also recruited others in their scheme including an investment adviser representative that received kickbacks of up to ten percent of the total shares of NXTH, MSEH, and CLRH he had his client buy. Finally, DelPresto’s business partner recruited his friends and family members to open brokerage accounts to trade the Issuers’ securities amongst each other and create a false appearance of liquidity.
DelPresto and MLF previously consented to judgments permanently enjoining them from violating the antifraud provisions of the Securities Act and Exchange Act and barring them from participating in an offering of penny stock. The final judgments order DelPresto and MLF to pay disgorgement of $12,109,500 and $1,802,015 in prejudgment interest.
Toomer was also permanently enjoined from violating the Securities Act and Exchange Act and permanently barred him from participating in an offering of penny stock. Toomer was also ordered to disgorge $19,334 and $3,364 in prejudgment interest for his participating in this scheme. In a separate administrative order, the SEC also barred Toomer from associating with any broker, dealer, investment adviser, or any registered position related to the securities industry.
If a broker, insurance agent, attorney, financial advisor, or CPA advised you to invest in BONU, NXTH, MSEH, or CLRH and you lost money, you may be able to recover. Our experienced team has been fighting for victims of broker misconduct and investment fraud since 1998. Call us at 1-877-410-8172 for a free, no-obligation consultation from an attorney who will fight for you.