In a statement, the regulator said it has secured an emergency court order freezing the assets of the accused, Joseph P Forte.
The market watchdog's complaint alleges that between 1995 and 2008, Mr Forte approached investors for money that he said would be invested in securities futures contracts through his firm, Joseph Forte LP.
Mr Forte consistently reported "impressive" returns of up to 37.96 per cent - but the SEC contests that in reality, he consistently made losses on his trading and funded payouts using cash from new investors.
The defendant is also accused of siphoning off millions of dollars in "fees" to personal accounts.
Daniel Hawke of the SEC said: "As alleged in our complaint, Forte engaged in lies, deception and rapacious behavior at the expense of innocent investors, many of whom considered themselves his friends and close acquaintances."
Papers filed by the SEC show that between January 1998 and October 2008, Forte LP made trading losses of $3.3 million.