The Securities and Exchange Commission is asking a court for an emergency order to freeze the assets of an Atlanta-based investment advisory firm and its principal, a private fund manager alleged to have engaged in a Ponzi-like scheme that cost investors some $17 million, according to a statement issued by the SEC.

The agency is targeting Summit Wealth Management, a registered investment advisor, and Angelo Alleca, who is charged with defrauding investors in what the SEC describes as a scheme that sought to conceal losses from trades that went bad through the creation of new private funds that were used to repay the original investors.

What's more, Alleca is alleged to have misrepresented his trading activities to clients, diverting money that had been intended for funds into individual securities that went sour.

"Alleca told Summit Wealth clients that he was investing their money in funds, but instead he was rolling the dice in the stock market without success," Bruce Karpati, chief of the SEC Enforcement Division's Asset Management Unit, said in a statement. "Rather than fess up about his trading losses, Alleca tried a cover up by creating new funds. Instead of winning back the money, he just compounded his fraud by suffering further losses."

Attorneys for Alleca did not immediately respond to requests for comment on the SEC's allegations.

According to the SEC, its examiners acted on tip and began to look into Alleca and Summit Wealth Management, uncovering a scheme in which Alleca and the firm allegedly sold interests in the Summit Fund, which was described as a so-called fund of funds. But instead of relying on that modest-risk diversification strategy, Alleca is charged with using his clients' funds to purchase securities in what the agency described as an active trading campaign.

The losses from the Summit Fund were hidden from investors, who were issued false account statements, according to the SEC.

When Summit Fund investors wanted to cash out, Alleca is alleged to have created at least two hedge funds that he would use to raise money from other Summit Wealth Management clients. The plan, as the SEC details it, was to funnel profits from those funds -- Private Credit Opportunities Fund LLC and Asset Class Diversification Fund LP -- back toward the Summit Fund, an illegal transfer of profits that the SEC said resembled a Ponzi scheme.

Neither firm returned calls seeking comment.

As it turned out, the two new funds fared poorly and as the losses mounted, Alleca continued to issue false statements to investors in the three funds at issue, according to the SEC.

The agency said that the $17 million losses were spread among about 200 investors.

The SEC filed its complaint with the Atlanta Division of the U.S. District Court in the Northern District of Georgia.