SEC Obtains Final Judgment in Stock Manipulation Scheme
Litigation Release No. 24672 / November 21, 2019
Securities and Exchange Commission v. Samuel DelPresto, et al., 15 Civ. 8656(D.N.J.)
On September 17, 2019, the Honorable Kevin McNulty of 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 roles in a market manipulation scheme.
The SEC's complaint, filed on December 15, 2015 and amended on December 21, 2015, alleged that DelPresto and his partner secretly acquired ownership of the vast majority of shares of at least four microcap companies as part of a scheme to heavily promote the companies' stocks and then dump the shares on the public. Toomer, an investment adviser associated with a registered entity, received cash kickbacks in exchange for purchasing three of the companies' stocks in his advisory clients' accounts, thereby creating an artificial appearance of liquidity and demand.
DelPresto and MLF previously consented to judgments permanently enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act and Exchange Act Section 10(b) and Rule 10b-5 thereunder and permanently barring them from participating in an offering of penny stock. The final judgments order DelPresto and MLF to pay, on a joint and several basis, disgorgement of $12,109,500 and prejudgment interest of $1,802,015. Monetary relief was deemed satisfied by a forfeiture order entered against DelPresto in a parallel criminal action brought by the United States Attorney's Office for the District of New Jersey.
The final judgment against Toomer permanently enjoins him from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, permanently bars him from participating in an offering of penny stock, and orders him to pay disgorgement of $19,334 and prejudgment interest of $3,364.
In a separate administrative proceeding, Toomer consented to the entry of a bar from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
The SEC's investigation was conducted by Rhonda L. Jung, Teresa A. Rodriguez, Melissa A. Coppola, Nancy A. Brown, Adam S. Grace, and Wendy B. Tepperman, and supervised by Lara Shalov Mehraban. The SEC appreciates the assistance of the United States Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.