The U.S. Securities and Exchange Commission (SEC) on Thursday charged two executives and their California-based investment firm with defrauding officers and directors at public companies in an $8 million stock-lending scheme.

The SEC charged James T. Miceli, 48, of Poway, Calif., and Douglas A. McClain, Jr., 37, of Savannah, Ga., joint owners of San Diego-based Argyll Investments, with acquiring stock from at least nine corporate officers since 2009 at a discount as collateral for loans, claiming that the shares would only be sold if they defaulted. Instead, they sold shares for full market value to fund the loans and used the proceeds for their own personal benefit, the SEC said.

Also charged in the SEC's complaint filed in U.S. District Court for the Southern District of California, is a broker through which Argyll attracted potential borrowers. The SEC alleges that AmeriFund Capital Finance LLC and its owner Jeffrey Spanier, 46, of Delray Beach, Fla., with violating federal securities laws by brokering numerous transactions for Argyll while not registered with the SEC.

According to the SEC, Miceli and McClain promised the borrowers they would return the shares when the loans were repaid. Rather than retaining the shares as required, they sold them without the borrowers' knowledge before or soon after funding the loans, the SEC said.  Because Argyll typically loaned the borrowers 30 percent to 50 percent less than the current market value of the shares, the company retained substantial proceeds even after funding the loans, the SEC said. As a result, Argyll reaped more than $8 million in unlawful gains.

The SEC alleges that Miceli and McClain induced at least nine corporate officers and directors since 2009 to transfer ownership of millions of shares of stock to Argyll as collateral for purported loans. Miceli and McClain promised to return the stock to the borrowers when the loans were repaid. However, rather than retaining the collateral shares as required, they sold the shares without the borrowers' knowledge before or soon after funding the loans.

"Miceli and McClain thought they had devised a foolproof way to make substantial risk-free profits, but their purported business model was nothing more than an illegal get-rich-quick scheme," Scott Friestad, an associate director in the SEC's Division of Enforcement said in a prepared statement.

The SEC also charged Miceli, McClain and Argyll with violating federal securities laws by improperly selling the collateral shares -- all of which were restricted securities -- into the public markets in unregistered transactions. They also failed to register with the SEC as brokers or dealers.

The SEC is seeking permanent injunctions against Miceli, McClain and Argyll Investments; forfeiture of any ill-gotten gains with prejudgment interest, and financial penalties.