Husband and wife John and Marian Morgan, Stephen Bowman and Thomas Woodcock are accused of collecting around $11 million from investors between 2006 and 2007 with the promise of handsome returns through their trading program.
When investors tried to redeem their money, they were given a range of excuses as to why the payment was delayed, including administrative problems, lawyers being on vacation and transactions needing to be scrutinized under the Patriot Act.
Some investors appear to have been paid back using other clients' funds, the SEC noted, but many received nothing.
The regulator said Mr Bowman appears to have spent some of the cash on these Ponzi-like payments, gambling expenses and commissions. He also sent millions to a bank account in Denmark to invest in a company, Morgan European Holdings.
John and Marian Morgan are said to have taken millions from this account to pay for real estate.