A father and son orchestrated a $2 million stock-trading fraud that mainly impacted senior citizens, according to a lawsuit filed by the Securities and Exchange Commission.

The SEC alleges Charles J. Dushek, 69, of Warrenville, Ill., and his son, Charles S. Dushek, 37, of Wheaton, Ill., made about $2 million over a four-year period by using clients' funds for millions of dollars in securities trades, then keeping the gains from the winning trades for themselves and assigning the losing trades to clients—most of whom were senior citizens.

The trades were conducted through a firm founded by the senior Dushek, Capital Management Associates of Lisle, Ill., according to the SEC. CMA is accused in the lawsuit of misrepresenting the firm’s proprietary trading activities to clients. Charles J. Dushek, a registered investment advisor, is president of CMA.

“The Dusheks and their firm had an obligation to treat clients fairly and honestly,” says Merri Jo Gillette, director of the SEC’s Chicago regional office. “Instead, they exploited the trade allocation process to enrich themselves at the expense of their clients.”

According to the SEC’s complaint, filed in federal court in Chicago, the scheme lasted from 2008 to 2012. During that period, the Dusheks made more than 13,500 purchases of securities totaling more than $350 million. The Dusheks typically waited to allocate the trades for at least one trading day, and often several days, by which time they knew whether the trades were profitable. The Dusheks kept most of the winning trades and assigned most of the losses to clients. Also, at the time of the trading, they did not keep any written record of whether they were trading client funds or personal funds.

During the time they were allegedly cherry-picking trades, one of the father’s personal accounts increased in value by almost 25,000 percent from 2008 to 2011, while many of his clients’ accounts decreased in value, the complaint says.

The illicit trading profits from his personal accounts were the father’s only source of regular income outside of Social Security, according to the SEC. He used profits from the scheme to make mortgage payments on his 6,500-square-foot luxury home, which included equestrian facilities. He also spent the money on luxury vehicles, including a Mercedes Benz SL550, membership in a luxury vacation resort, and vacations abroad. The son is alleged to have used trading profits to pay for a boat slip and vacations to ski resorts and Hawaii.

The SEC complaint asks for a judgments that would require them to return the fraudulently obtained money with interest and pay financial penalties.