The Securities and Exchange Commission filed a civil suit Monday alleging that a New York money manager, Thomas Priore of ICP Capital, swindled buyers of bubble-era housing-related debt.

The agency claims the firm socked away tens of millions of dollars by “fraudulently managing investment products tied to the mortgage markets as they came under pressure in 2007.”

The SEC says that in 2006, ICP began acting as the collateral manager on a series of CDOs named Triaxx, which invested mostly in residential mortgage-backed securities. Some of the Triaxx CDOs later ended up in the hands of the New York Fed, thanks to the government’s 2008 bailout of AIG , which had insured some of the CDOs.

Priore and his firm lined their pockets by directing the CDO investment trusts to buy assets at inflated prices, the SEC contends.

“ICP and Priore repeatedly caused the Triaxx CDOs to overpay for securities in order to make money for ICP and protect other ICP clients from realizing losses,” the SEC said. “The prices for such trades often exceeded market prices by substantial margins.”

The agency also alleges ICP caused the CDO trusts to make improper, unapproved investments, and misrepresented its actions to investors.

The SEC said the suit shows that “collateral managers bear the same responsibilities to their clients as every other investment adviser. When they violate their clients’ trust, we will hold them accountable.”

The suit comes two months after the SEC sued Goldman Sachs over its failure to tell investors in a collateralized debt obgliation it was arranging that short-seller John Paulson played a role in selecting the CDO’s investments.

The SEC suggested the charges against Priore won’t be the last in its probe of the CDO market, saying its investment is continuing.

ICP has been hit by some high-level defections over the past year, after a big expansion push. But Priore said he’s confident his firm acted properly and intends to vigorously defend the SEC suit.

“We’ll have our day in court,” Priore said.