The SEC filed civil fraud charges Monday against Security Brokerage Inc. and its president, Daniel Calugar, for allegedly defrauding mutual fund shareholders of millions of dollars through "improper late trading and market timing." The SEC said Mr. Calugar took advantage of Security Brokerage's status as a "self-clearing broker-dealer" to create false internal records that allowed him to buy or sell mutual funds an hour or two after the 4 p.m. ET cutoff. The funds principally were managed by Alliance Capital Management and MFS, but Sandra J. Harris, the SEC's associate Pacific regional enforcement director, said the agency isn't alleging that Alliance or MFS had any involvement in facilitating the late-trading activities. The assets of Mr. Calugar and Security Brokerage were frozen by the SEC; in a statement, Stephen M. Cutler, the director of the SEC's enforcement division, said the agency wanted to ensure that any proceeds Mr. Calugar obtained from illegal late trading and market timing will be returned to investors. The SEC and Alliance Capital reached a settlement last week over late-trading accusations; MFS has not been named in any legal action involving late trading. Mr. Calugar and other Security Brokerage executives could not be reached for comment.