The Securities and Exchange Commission obtained an asset freeze and other emergency relief against a purported Florida-based investment firm and its owner in connection with an alleged fraudulent unregistered securities offering that raised approximately $39 million from investors located mostly in Florida and Puerto Rico.

According to the SEC’s complaint filed in the U.S. District Court for the Middle District of Florida, since 2013 Kinetic Investment Group and Michael Scott Williams fraudulently raised $39 million from at least 30 investors in an unregistered fraudulent securities offering. It noted that Williams, 51, is a resident of San Juan, Puerto Rico, and resided in Sarasota, Fla., during the relevant time period.

The complaint said Kinetic and Williams solicited investors to invest in Kinetic Funds I, a fraudulent hedge fund with a sub-fund structure that they managed. They allegedly told investors that the largest sub-fund, Kinetic Funds Yield, invested solely in U.S.-listed financial products and that at least 90% of its portfolio was hedged using listed options. They also misrepresented Kinetic Fund Yield as a liquid investment, the complaint said. Instead, Williams invested a significant part of the sub-fund’s assets in a private start-up company he owned, the SEC alleged.

The complaint further alleged that since 2015, Williams misappropriated at least $6.3 million of Kinetic Fund’s assets to fund other business ventures and for personal expenses such as paying off the mortgage ($37,000) on a relative’s hous, along with the purchase of three luxury apartments and two parking spaces for himself in San Juan for $1.5 million.

The SEC’s complaint charges Kinetic Group and Williams with violating the antifraud provisions of the federal securities laws, and with aiding and abetting Kinetic Group’s violations of the federal securities laws. It seeks injunctions, disgorgement of allegedly ill-gotten gains with pre-judgment interest, and financial penalties against the defendants.

The SEC’s investigation is continuing.