The Securities and Exchange Commission has filed an emergency action and obtained a temporary restraining order and asset freeze against a purported investment firm and its principal who allegedly bilked more than a dozen investors out of $150,000.

According to the complaint, Winston Reed Investments LLC and Mark N. Pyatt in April 2017 began to solicit investors for a pooled fund they claimed would use a sophisticated trading strategy to trade in futures contracts, foreign exchange and stocks. Instead, Pyatt misappropriated the vast majority of investors’ funds to buy a recreational vehicle and jewelry, pay various living expenses and make Ponzi-like payments to other investors.

The complaint said Pyatt, 40, of Williston, N.D., and Winston Reed concealed their fraud by providing investors with false information about their account values and purported trading gains. One example, the complaint noted, is a January 2018 email from Pyatt stating that an investor had made "240% on Your Money in Just a Matter of 3 Months . . . Not too shabby guys!” But in reality, when Pyatt and Winston Reed did trade, they cumulatively lost money, the complaint said.

Moreover, the complaint noted that Pyatt and Winston Reed concealed their fraud shortly before the initial investors were eligible to withdraw funds due to a purported 24-month lock-up period. Pyatt told investors that “a complete and catastrophic loss” had occurred that prevented Winston Reed from returning any funds. He falsely told investors the loss was the alleged failure of Winston Reed's brokerage firm to implement a trading instruction properly. In reality, Pyatt could not repay investors because he had already misappropriated the majority of investors' funds, according to the complaint.

The complaint further states that Pyatt is continuing his efforts to defraud investors by, among other things, telling them of his intention to restart his trading group using a new trading platform. It said Pyatt and Winston Reed "have engaged in, and unless restrained and enjoined by this court, will continue to engage in acts and practices that constitute and will constitute violations of the antifraud provisions."

The SEC seeks emergency relief, as well as permanent injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and a civil penalty. The complaint also seeks disgorgement of allegedly ill-gotten gains with prejudgment interest from a relief defendant, Daniel G. Randolph, 22, also of Williston, N.D., who was listed on documents provided to investors as president and owner of Winston Reed.