Two multi-billion dollar hedge fund advisory firms as well as seven fund managers and analysts stand accused for their involvement in a $78 million insider trading scheme based on non-public information from Dell and Nvidia Corporation.

The SEC alleges that a network of closely associated hedge fund traders at Connecticut-based Diamondback Capital Management and Level Global Investors illegally obtained insider information about Dell and Nvidia in 2009.

According to a complaint filed in a federal court in Manhattan, the illicit gains in the Dell and Nvidia insider trades exceeded $62.3 million and $15.7 million, respectively.

“These are sophisticated players who built a corrupt network to systematically and methodically obtain and exploit illegal inside information again and again at the expense of law-abiding investors and the integrity of the markets,” said Robert Khuzami, director of the SEC’s division of enforcement.

The regulator’s complaint seeks the defendants to give up their unlawful gains and pay prejudgment interest and financial penalties. The investigation, helped by the US attorney’s office for the Southern District of New York and the FBI, is continuing.

Separately, the SEC has obtained an emergency court order to freeze the assets of two St Louis-based private investment funds and related management firms, after suing them and their principal for a defrauding scheme.

The regulator accuses Burton Douglas Morriss for diverting more than $9 million of investors’ money to himself and then trying to cover this up by calling them loans in his companies’ books.

Morriss allegedly raised $88 million from investors who were told that it would be invested in emerging financial services and technology companies. Instead, he misused the money for personal expenses, for example an African safari trip, according to the SEC.

The complaint raised in federal court charges Morriss, his two private investment funds (MIC VII and Acartha Technology Partners), and his management firms (Gryphon Investments III and Acartha Group). Morriss Holdings, where he allegedly transferred some of the investor funds, is named as a relief defendant.

The SEC seeks to ban Morriss from serving as a public company officer or director. It is also looking to impose financial penalties against him and the entity defendants, as well as disgorging all ill-gotten gains from them and relief defendant Morriss Holdings.