The US Securities and Exchange Commission has cracked down on an unregistered Connecticut-based advisory firm, the owner of which allegedly stole millions of dollars from investors for his own personal use.

A prominent US regulator earlier this week charged an unregistered Connecticut-based investment advisory business and its owner with stealing at least $3.95 million from investors to settle a private lawsuit and other personal matters. 

The Securities and Exchange Commission alleged that Sentinel Growth Fund Management and its founder, Mark Varacchi, misrepresented to investors that money they deposited with the firm would be allocated to up-and-coming hedge fund managers for investment purposes. 

Varacchi and Sentinel Growth Fund Management did not transfer all of the money and instead manipulated account activity, account balances and investment returns as part of a scheme to siphon off investor funds, according to the SEC's complaint. 

In total, Varacchi and his company allegedly stole at least $3.95 million from investors, including more than $1 million to settle litigation brought by Varacchi's former employer. 

Sentinel Growth Fund Management was not registered with the SEC or any state to do business as an investment advisor. 

The SEC's charge seeks disgorgement and penalities against Varacchi and Sentinel Growth Fund Management. 

''As alleged in our complaint, Varacchi promised investors that their money would be routed to up-and-coming hedge fund managers when in reality he was diverting significant portions for personal use and unauthorized business expenses,'' said Anthony Kelly, co-chief of the SEC enforcement division's asset management unit.