“Bovee eventually clarified to investors that they had two options: convert their debt positions with INR into ‘preferred stock’ equity positions, for which they would no longer receive monthly interest payments, or reach some sort of withdrawal arrangement with INR,” the SEC said.
Bovee, the SEC noted, also told investors that the restructuring was necessary because INR was in the early stages of going public. But when investors notified her “that they had not received interest payments for many months and wanted a return of their principal immediately, Bovee told them that INR’s response would be ‘no,’” the SEC said. “Instead, INR, through Bovee and others, offered investors who did not want to convert their debt positions into ‘preferred stock’ a gradual return of principal over many years.”
For her part in the scheme, the SEC said Bovee was paid more than $715,000, all or almost all of it in investor funds.
She could not be reached for comment.
The SEC complaint sought a temporary restraining order and a preliminary injunction freezing the assets of Williams, Hirschmann and the relief defendants, requiring accounting from each of them. It also ordered the men and relief defendants to “jointly and severally disgorge their ill-gotten gains, together with prejudgment interest.”