Donald Shelby Toomer, of Las Vegas, Nevada, a stockbroker formerly associated with Wells Fargo Advisors Financial Network, LLC, was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity per a FINRA Officer of Hearing Officers Expedited Hearing Panel Decision containing findings that Toomer refused to cooperate with a FINRA investigation into allegations that Toomer committed securities fraud. Department of Enforcement v. Donald Shelby Toomer, No. 2016048445101 (Oct. 5, 2016).
According to the Decision, Toomer was charged by the United States District Court for the District of New Jersey in an Indictment on December 21, 2015, in which Toomer was alleged to have committed securities fraud. The Securities and Exchange Commission also took action against Toomer in a parallel civil matter.
According to the Indictment, between 2008 and 2011, three individuals and Toomer entered into a conspiracy to commit stock price manipulations involving Mesa Energy Holdings, Inc., Clear-Lite Holdings, Inc., and NXT Nutritional Holdings, Inc. An estimated $30,000,000.00 in illegal profits were reportedly obtained via the conspirators.
The Indictment stated that Toomer helped increase the stock price of the aforementioned entities through transmitting materials to investors in order to promote the stock. He reportedly engaged in this tactic at the same time as he and his co-conspirators were effecting trades on a coordinated basis. The Indictment stated that shares would be sold by members of the conspiracy after prices were artificially inflated. Toomer was reportedly responsible for facilitating the scheme through making recommendations for customers to invest. Throughout this time frame, according to the Indictment, Toomer never notified Wells Fargo regarding his compensation.
The Indictment further stated that Toomer raked in several hundred thousand dollars in compensation, including kickbacks received by his conspirators. Apparently, this scheme involved customers of Wells Fargo purchasing several hundred thousand shares in the entities. Toomer purportedly informed Wells Fargo that he had not solicited the customers’ purchases in such entities, so as to avoid his firm scrutinizing the transactions.
Apparently, the purchases of stock in the aforementioned entities by customers was geared to provide prospective investors with the impression that the equities were in demand, and for purposes of increasing the volume of trading and furthering the promotional efforts of the co-conspirators. The Indictment alleged that Toomer, by way of furthering his own personal interests in the scheme, did not make investment recommendations to customers with the customers’ best interests in mind.
The Indictment stated that in one case, in an effort to help preserve the value of Mesa Energy Holdings, Inc. securities (which Toomer’s co-conspirators had possessed), Toomer actually declined to facilitate the sale of a firm customer’s Mesa Energy Holdings, Inc. In another case, Toomer supposedly used funds obtained by his co-conspirators to cover losses incurred by certain investors that purchased Clear-Lite Holdings, Inc.
Toomer was alleged in the Indictment to have violated Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, as well as Investment Advisers Act of 1940 Section 206. Additionally, the Indictment alleged that Toomer committed conspiracy to commit investment advisor and securities fraud. Wells Fargo reportedly terminated Toomer a couple days following his Indictment, and notified FINRA of the SEC civil action and Indictment on January 4, 2016.
Following the receipt of this information, FINRA’s Extended Hearing Panel Decision stated that FINRA requested in a January 20, 2016 letter to Toomer that he provide information and documentation based upon allegations in the Indictment. The Decision indicated that Toomer reached out to FINRA personnel on February 17, 2016, in which Toomer’s counsel reportedly declined to provide information and documentation that FINRA requested.
The Decision stated that Toomer’s failure to comply with FINRA’s investigation resulted in May 12, 2016 suspension from associating with any FINRA member. Toomer was ultimately barred by FINRA after his conduct was found to be violative of FINRA Rules 2010 and 8210.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
