The Securities and Exchange Commission (SEC) continues to make good on its promise to crack down on fraud in the financial sector.

Earlier this week, the commission charged a money manager Ronald Feldstein with defrauding investors and brokerage firms. Using a free-riding scheme—which happens when customers buy or sell securities in their brokerage accounts without having the money or shares to actually pay for them—Feldstein caused more than $2 million in losses for the three brokerage firms he defrauded. The SEC claims Feldstein also bilked investors out of nearly a half-million dollars and used the money to fund an extravagant lifestyle, including a luxury car and summer vacations.

The SEC said that Feldstein opened three brokerage accounts in the names of investment funds that he created but had no intention of paying for the stocks if they resulted in losses. He only planned to pay for the funds if the stock price increased. The commission also claims that Feldstein solicited some business owners for money to invest on their behalves but then used the money for personal expenses.

“Without sufficient assets to pay for his stock purchases, Feldstein illegally arranged trades in which he got the profits if he won and left brokerage firms holding the bag if he lost,” Andrew M. Calamari, the director of the SEC’s New York Regional Office, said in a statement.  “Then Feldstein used blatantly false promises to lure longtime acquaintances to pour their life savings into his investment schemes that were footing the bill for his luxurious lifestyle.”

According to the SEC’s complaint, Feldstein is charged with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5.  The commission also charged Feldstein violating Section 17(a) of the Securities Act.

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