Federal regulators on Monday filed civil fraud charges against Thomas Priore and ICP Asset Management in connection with complex securities tied to mortgages.

The Securities and Exchange Commission accused Thomas Priore and ICP Asset Management of fraudulently managing the securities in a way that cost investors tens of millions of dollars. The SEC also said Priore and the New York firm he owns and heads as president improperly reaped millions in fees and undisclosed profits at the expense of clients.

Priore and ICP denied the SEC's charges and said they would contest them in court. In a statement, Priore and the firm said they "at all times acted in the best interests of their clients and intend to vigorously defend themselves against the SEC's allegations."

The allegations involve four multibillion-dollar collateralized debt obligations.

In its civil lawsuit against Priore and ICP Asset Management, filed in federal court in New York City, the SEC alleged that the defendants channeled more than $1bn of trades into the so-called Triaxx CDOs at what they knew were inflated prices. They repeatedly caused investors in the CDOs to overpay for securities with an eye to making money for ICP Asset Management and shielding certain ICP clients from losses, the SEC said.

ICP repeatedly made CDO investments without the required approvals from investors, the agency said.

"ICP and Priore repeatedly put themselves ahead of their clients," SEC Enforcement Director Robert Khuzami said in a statement. "Instead of acting as fiduciaries, they took advantage of a distressed market to line their own pockets."