May 22--CONCORD -- A former securities trader who spent more than three years in prison after he was convicted of fraud and illegal trading that helped collapse several New Hampshire banks is facing fresh charges by state officials who say he and his wife engaged in trading without a license.
The Secretary of State's Office on Thursday issued an order compelling Charles Howard to cease investment activities and pay $200,000 in fines and reimbursements on allegations that he collected nearly $1 million in fees seeking investments in companies that resulted in investors losing millions of dollars. At one time, Howard enjoyed a net worth of more than $30 million in the late 1980s before going to federal prison.
"Mr. Howard did not learn from his prior brushes with the law and again has engaged in illegal activity harming New Hampshire investors," said Jeffrey Spill, deputy director of the state Bureau of Securities Regulation.
As a condition of his conviction, Howard was permanently barred from associating with "any broker, dealer, municipal securities dealer, investment adviser or investment company," according to the petition.
But state officials said it took no time for Howard to go right back into the business of advising companies on investing. They said he convinced people to invest in unstable companies while charging enormous fees based on ability to pay instead of services provided. He was released from prison in the mid 1990s and in 1998 registered the trade name "Howard Investments." The company is no longer active, according to the petition.
Howard and his wife, Carolyn, are charged with dishonest and unethical securities trading, as well as selling and buying securities without a license.
He and his wife, along with Howard Interests, are accused of collecting directors' fees and consulting fees from companies, including Video Display Corp. of Tucker, Ga., and another company called MDU Communications International. Their payments totaled nearly $1 million over the course of about a decade, according to the petition.
He is also accused of advising nine individuals to invest in Video Display Corp. and MDU, all while his wife served as a director of both companies. He collected consulting fees totaling about $367,000. When the stock market crashed in late 2008 and into early 2009, the clients lost a total of nearly $2.5 million, according to the petition.
He and his wife are accused of "failing to disclose to advisory clients that they were not properly licensed to give investment advice for a fee and that they had a material conflict of interest in the receipt of fees from the companies VDC and MDU they were recommending to purchase stock in," according to the petition.
When Howard and his wife appeared before the BSR separately in, respectively, June 2012 and November 2013, each exercised their Fifth Amendment rights and refused to answer the BSR's questions, the petition said.
At one time, Howard was the "King of Bank Stocks" in New England during the booming 1980s when many private banks went public.
The one-time Bedford resident had a $4 million mansion, luxury cars, had a birthday party for his wife in Paris and dined at the world's best restaurants all fueled by commissions for trading bank stock among banks and their office holders.
Howard, an adviser to the defunct Amoskeag Bank -- a mainstay of Manchester -- and other banks, manipulated the price of the stock with buying sprees that fueled price increases. When the price went up, Howard sold his own holdings, making millions in short-term profits.
Howard, the former director of Thompson McKinnon Securities Inc. of New York City, pulled down a multimillion dollar salary during the height of his wheeling and dealing.
The good times ended when federal officials began investigating insider trading related to the merger of Coastal Savings Bank in Portland, Maine, with Suffield Savings Bank of Suffield, Conn.Soon Howard and some of his clients were charged with insider trading and securities fraud.
Howard was charged with obstruction of justice and perjury. He pleaded guilty to conspiracy to obstruct a federal grand jury investigation and was sentenced to five years in jail and a $250,000 fine. He was released after serving eight months.
After his release, he was charged with bank fraud and offering kickbacks to Amoskeag banking official David Towner when Howard was handling the bank's portfolio. He was sentenced to five years in prison and served about 30 months before his release in 1996.
Federal prosecutors say he contributed to the New England banking collapse in the late 1980s that resulted in federal officials taking over and closing three of the state's five biggest banks.
The BSR's order compels the Howards to cease and desist all investment activities and pay $150,000 in an administrative fine and reimburse the bureau's $50,000 in investigative expenses.
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