The SEC announced that default judgments were issued against Interinvest Corporation, a MA-based RIA, and its owner, Hans Peter Black, who allegedly were paid for referring clients into financially troubled penny stock companies. The Court entered the decision after both Interinvest and Black failed to answer the SEC complaint dated 6/16/15.

The SEC had charged Interinvest and Black with funneling more than $17 million in client assets into 4 financially troubled Canadian penny stock companies in which Black had undisclosed business and financial interests. Black served on the board of directors of these companies and he was paid some $1.9 million in consulting fees from those companies – payments were made into an entity Black controlled. Meanwhile, the clients lost as much as $12 million of their assets based on the trading in the penny stock companies, some of which were purportedly in the business of exploring for gold or other minerals.

Under the court-directed judgments, each defendant was ordered to pay, jointly and severally, $5.4 million in disgorgement and prejudgment interest. Black was also hit with $2 million in civil fines, while Intervest was fined $1.5 million. [Good luck collecting!]