The operator of a former Kirkland securities-brokerage firm was charged in both civil and criminal lawsuits Sept. 8 with swindling clients out of millions of dollars and trying to hide the losses from the victims, who often were friends or relatives.

The federal charges were brought against Richard A. Finger, Jr., of Bellevue, who operated a business called Black Diamond Securities LLC in Kirkland, according to the filings.

Finger was charged in one criminal count, accusing him of wire fraud, and a civil lawsuit filed by the federal Securities and Exchange Commission. A criminal conviction could bring up to 20 years in prison and a $2 million fine.

The civil case seeks an order to stop Finger from further violations, freezes any assets, allows such actions as seizing computers and keeping him from destroying documents, and would call for him to pay unspecified penalties.

Finger was freed on his personal recognizance after the appearance before a United States magistrate in Seattle. He’s next to appear in federal court Sept. 22.

Both the filings essentially repeat similar accusations.

“Beginning around February 2011 … Finger embarked on a high-frequency, high-risk options-trading strategy that generated spectacular trading losses for his customers and huge commissions for himself,” the SEC charges noted.

“In order to conceal the trading losses and his personal enrichment from his customers — mainly friends and family — Finger sent them doctored account statements, which inflated their account balances and understated the commissions Finger had charged them,” the filings continued.

Of about $5 million invested by clients since February, “only about $500,000 remains in the accounts,” the charges added.

“Finger’s undisclosed activity, while disastrous for his customers, helped fund Finger’s lifestyle,” the SEC charges continued.

Much of the money went to fund a $2 million home and luxury vehicles, the SEC investigation revealed.

In one example of the types of trading conducted by Finger, a customer was described as depositing $1 million in a Black Diamond account in June. The customer was not identified, but was described as “an elderly relative.”

By the end of July, Finger had made $19 million in purchases with the money, despite instructions to “invest the money conservatively.”

During the trading, he collected some $560,000 in commissions, the SEC found, often buying and selling the same security within minutes. Over 320 trades were made in the account in June alone, the charges added, with staggering losses: On Aug. 3, Finger provided a statement to his client showing there was $796,234 in the account, while the real balance was $62.

In a statement, Finger’s attorneys, Solomon Wisenberg and David Bukey, said that Finger “has acknowledged deceiving some of his customers” and that he has spoken to each of the customers and apologized for his behavior.

Finger is cooperating with investigators and is committed to “providing as much restitution as he can to his victims,” the attorneys added.

Kirkland Reporter Reporter Peyton Whitely can be reached at pwhitely@kirklandreporter.com or 425-822-9166, ext. 5052.