The Securities and Exchange Commission is charging Thomas Priore, owner and president of ICP Asset Management, with the fraudulent management of investment products tied to the mortgage finance markets. It is alleged that ICP and three affiliated firms misrepresented four multi-million-dollar collateralized debt obligation (CDO) platforms backed by mortgage securities (MBS). The SEC claims the CDOs lost tens of millions of dollars, while Priore collected tens of millions of dollars in advisory fees and undisclosed profits at the expense of their clients and investors. According to the SEC's complaint, in 2006 ICP started as the collateral manager for what were known as the Triaxx CDOs, which invested primarily in mortgage-backed securities, bonds based on homeowners paying their monthly note. The firm's broker-dealer ICP Securities and umbrella company Institutional Credit Partners are also charged. The SEC complaint centers on the allegation that collateral managers can be held accountable for poor trading practices, as is the case with other investment advisors. In this case, ICP made numerous prohibited trades in CDOs, the SEC claims. Further, when cash flow from the CDOs started coming up short, Priore allegedly drew from hedge fund accounts to make up the shortfall. "ICP and Priore repeatedly put themselves ahead of their clients," said Robert Khuzami, Director of the SEC's Enforcement Division. "Instead of acting as fiduciaries, they took advantage of a distressed market to line their own pockets." The SEC is looking for permanent injunctions against the named parties as well as financial penalties. Write to Jacob Gaffney.