According to the watchdog's complaint, Peter Son and Jin Chung deceived around 500 investors in the United States, South Korea and Taiwan between 2003 and the end of 2008 by promising annual returns of up to 36 percent from forex trading.
The pair are alleged to have claimed their companies, SNC Asset Management and SNC Investments had produced 50 per cent annual profits from such trading in each year since 2003.
However, the SEC said they never actually traded on the forex markets.
Instead, it claims Mr Son and Mr Chung used new clients' money to pay "returns" to customers, while also misappropriating their funds for their own personal use.
The regulator said that included making mortgage payments on Mr Son's multi-million dollar California home and paying a salary to his wife for which she did no work.
As part of its complaint, the SEC is seeking an emergency freeze on the defendants' assets.