According to the Securities and Exchange Commission, Interinvest Corp., a Massachusetts investment adviser, bilked investors of over $12 million, perhaps up to $17 million, when its founder invested their money in Canadian penny stock companies in which he had undisclosed interests. Hans Peter Black, who is a resident of Canada, calls the charges against him \u201coutrageous.\u201d<\/p>\n
The SEC claims that Interinvest and Black funneled over $17 million of client funds to four penny stock companies on whose boards he sits. Another entity that he controls received about $1.7 million in Canadian dollars. Black\u2019s relationships to all of these entities were purportedly never disclosed to clients or stated in the firm\u2019s Form ADV. This is the form that investment advisers use to register with the SEC and state securities regulators.<\/p>\n
In February, the regulator sent a subpoena to Interinvest requesting documentation of its bank accounts, compliance policies, and trades. The SEC said that Black did not comply with its request. Black also is accused of misrepresenting the nature of the penny stock company\u2019s investments, disregarding client instructions, and purposely deviating from the conservative investment strategy his firm promoted.<\/p>\n