The U.S. Securities and Exchange Commission (SEC) is accusing a Boston-based investment advisory firm and its Canadian owner of directing more than US$17 million into four Canadian penny stock firms without disclosing the owner’s financial interest in those firms.

The SEC has filed fraud charges against Interinvest Corp. and Hans Peter Black, of Westmount, Que., alleging that they funnelled client assets into four Canadian penny stocks without disclosing that Black had served on the boards of the four firms at various times and that these firms had collectively paid $1.7 million to a company that he controls, Montréal-based Zurmont Research Inc.

In doing so, the SEC alleges that Interinvest and Black violated the antifraud and related provisions of the federal securities laws. The allegations have not been proven.

The regulator is seeking a court order to freeze Interinvest’s assets and to prohibit the company from exercising authority over client assets. The SEC is also seeking to permanently enjoin Interinvest and Black from violating the securities laws and to require them to repay allegedly ill-gotten gains with interest and penalties.

The SEC’s complaint, which was filed late Tuesday in federal court in Boston, reports that the clients had unrealized losses of $12 million on their $17 million investment as of March. In addition, the SEC alleges that Interinvest and Black have stonewalled its investigation after the alleged violations were uncovered in an SEC compliance exam.

“Investment advisors have a duty to put their clients’ interests first and fully disclose all conflicts of interest,” said Paul Levenson, director of the SEC’s Boston office. “We allege that Interinvest and Black violated that duty by investing client money in companies [in which Black] has a stake without fully disclosing that conflict to clients.”

The four penny stock firms named in the SEC’s complaint are Tyhee Gold Corp., Williams Creek Gold Ltd., Amorfix Life Sciences Ltd., and Wi2Wi Corp.

The SEC also notes that an affiliated Canadian firm, Interinvest Consulting Corp. of Canada Ltd., was registered in both Quebec and Ontario as a portfolio manager until 2012. Those registrations are currently listed as suspended (pending surrender) in the Canadian regulators’ National Registration Database. None of those firms are charged in the SEC’s complaint.