On June 8, 2010, one Howard M. Appel of Wayne, Pa., walked out of a federal prison in Nowheresville, same state, and became a free man. Well, sort of: After just about two years enjoying the hospitality of the Bureau of Prisons on account of his securities fraud and money-laundering convictions, Appel wasn’t free to get right back into the stock game, on account of having been banned by FINRA—well, actually, FINRA predecessor NASD, in 1991, for another fraudulent scheme. Indeed, Appel has quite the biography, as our friends at Seeking Alpha noted three years ago.
Appel also wasn’t exactly totally free in the personal liberty sense, either: His sentence included three years of supervised release. For all intents and purposes, however, on this count, he was free, because the supervision does not appear to have been particularly searching.
The Securities and Exchange Commission today charged Howard M. Appel with manipulating the stocks of three microcap companies while on supervised release following his criminal conviction for a prior securities fraud.
The information alleges that Appel—a former licensed stockbroker with two prior securities-fraud related convictions—secretly acquired large blocks of stock in publicly traded companies, including Virtual Piggy, Inc. (ticker symbol “VPIG”), and Red Mountain Resources, Inc. (ticker symbol “RDMP”), to manipulate the market in those stocks. As alleged, Appel acquired title to the shares in the names of nominees in order to hide his ownership block from investors and made between $3,000,000 and $4,000,000 from his scheme.
The above are from the SEC and Justice Department press releases, although it looks like the Manhattan D.A.’s office, some alleged pump-and-dump victims and Seeking Alpha were on the case before the FBI got wind of things, and certainly before Appel's parole officer, who probably still has no idea. Not to worry, though: If he’s convicted this time, the DoJ is seeking… three years of supervised release.
Recidivist Securities Fraudster Charged with Multi-million Dollar Stock Manipulation Scheme [DoJ]
SEC Charges Recidivist in Stock Manipulation Scheme [SEC]
Apparent Connections To A Convicted Stock Promoter: Another Chapter In The Organovo Saga [Seeking Alpha]