Investing

SEC Levies Additional Charges in Pump-and-Dump Scheme

Chris Lange

Published: December 21, 2015 3:56 pm

Last Updated: January 13, 2020 3:50 pm

The U.S. Securities and Exchange Commission (SEC) announced additional fraud charges in a market manipulation case the agency filed last week. Originally, the charges were against a New Jersey man and his company in regard to illicitly pocketing $13 million from an elaborate pump-and-dump scheme.

The SEC amended its complaint to additionally name Donald Toomer Jr., a Las Vegas-based financial advisor who allegedly agreed to buy shares of three microcap stocks in client accounts in exchange for hundreds of thousands of dollars in cash kickbacks.

Toomer is being charged with violations of the antifraud provisions of the federal securities laws and the SEC is seeking a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest and a penalty, and a penny-stock bar.

In the original complaint, the agency alleged that Samuel DelPresto teamed up with others to secretly obtain control of substantially all available stock in four microcap companies and to facilitate coordinated trading that created the appearance of liquidity and market demand for the stocks.

After unwitting investors were enticed through promotional campaigns to buy the stock at inflated prices, DelPresto then dumped his shares on the market.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against DelPresto and now Toomer.

Andrew M. Calamari, Regional Director of the SEC’s New York office, commented:

We allege that Toomer abused his role as a financial advisor to help create the false appearance of market demand in these stocks and facilitate the pump-and-dump scheme.