White Peaks Asset Management sues Florian Homm and Absolute Capital Management for allegedly using investor funds to buy illiquid penny stocks through a brokerage firm in which he owned a 50 percent stake.

The fund had a total of $ 500 m in illiquid penny stocks, forcing the fund to suspend withdrawals after many investors sought redemptions. In addition, the law suit alleges, Homm used investor money to prop up a penny stock in which he was beneficially a large personal shareholder.