Former Las Vegas Wells Fargo Broker Donald S. Toomer Allegedly Received Kickbacks for Selling Microcap Stocks

Silver Law Group is investigating former Las Vegas, Nevada-based Wells Fargo Advisors Financial Network, LLC (CRD# 11025) broker Donald S. Toomer (CRD# 2842723) after he was discharged by Wells Fargo and named in an SEC and criminal complaint over allegations that he sold microcap stocks to his customers in exchange for cash kickbacks.

On December 21, 2015, a criminal charge was filed against Toomer charging him with conspiracy to commit securities fraud and investment adviser fraud, investment adviser fraud, and securities fraud.  The same day, the SEC announced civil charges against Toomer when it amended its initial complaint.  Wells Fargo subsequently allowed Toomer to resign following the allegations, according to Toomer’s FINRA BrokerCheck report.

According to the SEC amended complaint (the “Complaint”), the SEC alleges Toomer abused his role as financial advisor to help create the false appearance of market demand in four microcap stocks: BioNeutral Group, Inc. (“BONU”); NXT Nutritionals Holdings, Inc. (“NXTH”); Mesa Energy Holdigns, Inc. (“MSEH”); and Clear-Lite Holdings, Inc. (“CLRH”) (collectively, the “Issuers”).

Toomer took place in a classic pump-and-dump scheme, according to the Complaint, where Toomer would purchase the stock in his clients’ portfolios in exchange for receiving kickbacks of up to ten (10) percent of the total shares he had his clients buy.  Toomer’s purchases in his clients’ accounts in the open market contributed to the Issuers’ rising stock price and gave a false appearance of market demand for the securities.

Toomer allegedly made hundreds of thousands of dollars on the pump-and-dump scheme, according to the Complaint.  FINRA permanently barred Toomer after he failed to respond to a FINRA request for information.

Wells Fargo employed Toomer from September 2009 up until December 2015 at its Las Vegas, Nevada branch.

A pump-and-dump scheme is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements.  Perpetrators who already have a position in the company’s stock sell their positions after their hype has resulted in higher share prices.

The tactics, which is illegal, has been depicted in films such as “Boiler Room” and “The Wolf of Wall Street,” where warehouses full of telemarketing stockbrokers ardently pitch penny stocks.  Brokers are incentivized, like the SEC alleges in the Complaint, by high commissions and kickbacks to sell these stocks.

If you have invested with Donald S. Toomer and Wells Fargo and have lost money doing so, you may be able to recover some or all of your losses.  Our lawyers are experienced in recovering investor losses due to broker and brokerage firm misconduct through FINRA arbitration.

Silver Law Group represents the interests of investors who have been the victims of investment fraud.  If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.