This week, the Securities and Exchange Commission announced that it had charged a recidivist in a stock manipulation scheme. Howard M. Appel was charged with manipulating the stocks of three microcap companies while on supervised release following a criminal conviction for another securities fraud. The SEC’s complaint alleges that Appel orchestrated several schemes to manipulate the market for trading in shares of Red Mountain Resources, Rio Bravo Oil, and Virtual Piggy.
The defendant is accused of trying to conceal his activity by using overseas associates and nominee brokerage accounts. Appel is accused of secretly acquiring ownership or control over sufficient shares of the companies so that he and his associates would be able to manipulate their stocks using coordinated trading activities. The complaint suggests that Appel kept control over the trading and engaged in matched trading with his associates.
He allegedly sought to coordinate artificial bidding activity to prevent the price of Red Mountain Resources Inc. from dropping. Appel has agreed to settle the SEC’s charges. He will be barred from serving as an officer or director of a public company. Monetary sanctions and other relief will be determined by the court at a later date. A parallel criminal action has also been filed again Appel. Further details have been made available here.