The agency is seeking an emergency asset freeze against Angelo Alleca and Summit Wealth Management, as it hopes to prevent further investor losses. So far, the SEC estimates these stand at around $17 million among some 200 clients. According to its complaint, overall through Summit Wealth Alleca was responsible for managing around $500 million in client assets held in managed accounts.

Alleca allegedly told clients he was investing their money in funds when he was actually investing it in the stock market directly at his own discretion.

According to the regulator’s complaint, which was filed in federal court in Atlanta, Summit sold interests in Summit Fund, which it claimed acted as a fund-of-funds but which actually invested in securities directly. In doing so, Alleca racked up large trading losses, which he then hid from clients by creating new funds - the Private Credit Opportunities and Asset Class Diversification funds - to attract money to pay back previous investors. He allegedly created false account statements to obscure his actions.

The Commission received a tip-off about the firm which led to an exam, which revealed something was “amiss,” it said.

The complaint charges Alleca, Summit Wealth Management, and the three funds with violations of the antifraud provisions of the federal securities laws.