U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23294 / June 26, 2015
Securities and Exchange Commission v. Interinvest Corporation, Inc. et al., Civil Action No. 15-cv-12350 (D. Mass.)
SEC Obtains Preliminary Injunction Against Massachusetts Investment Adviser Charged with Fraudulently Funneling Client Assets to Companies in Owner's Interest
The Securities and Exchange Commission today announced that, on June 25, 2015, it obtained a preliminary injunction against a Massachusetts-based investment advisory firm and its owner charged with fraud for funneling more than $17 million in client assets into four financially troubled Canadian penny stock companies in which the owner has undisclosed business and financial interests.
The SEC's complaint, filed on June 16, 2015, alleges that clients at Interinvest Corporation may have lost as much as $12 million of their $17 million investment based on the recent trading history of shares in the penny stock companies, some of which are purportedly in the business of exploring for gold or other minerals. According to the SEC's complaint, Interinvest's owner and president Hans Peter Black has served on the board of directors of these companies, which have collectively paid an entity he controls approximately $1.7 million. The SEC alleges that Black's involvement with these companies and his receipt of payments from them created a conflict of interest that he and Interinvest failed to disclose to their advisory clients.
Black consented to the entry of the preliminary injunction against him, and the court determined to impose the same preliminary relief against Interinvest. The preliminary injunction entered against Interinvest and Black includes an order to freeze Interinvest's and Black's assets and to prohibit the firm and Black from continuing to exercise investment authority over client assets under management. The SEC's complaint seeks to permanently enjoin Interinvest and Black from violating the securities laws and require them to repay allegedly ill-gotten gains with interest and penalties.
For further information, please see Litigation Release Number 23288 (June 17, 2015).