WASHINGTON (AP) – Federal regulators on Wednesday charged an investment adviser with securities fraud, saying he bilked clients out of at least $6.5 million in the first scheme using the government’s $700 billion financial bailout program as a front to lure investments.

The Securities and Exchange Commission won a court order freezing the assets of Gordon Grigg of Nashville, Tenn., and his firm, ProTrust Management Inc.

Grigg and ProTrust consented to a temporary restraining order, the asset freeze and an accounting of all funds raised, the SEC said. The agency is seeking unspecified restitution and fines against them; a hearing has been scheduled for Feb. 6.

The SEC alleges Grigg defrauded clients by telling them their money was being invested in the Treasury Department’s financial rescue plan, called the Troubled Asset Relief Program, and other securities that actually don’t exist.

Grigg represents himself as a financial planner and investment adviser, but neither he nor his firm is registered with the SEC or a state regulator, the agency said in its civil lawsuit filed in federal court in Nashville. The SEC said that Grigg, who obtained control over funds of at least 27 clients, falsely claimed to have invested their money in securities described as “private placements,” creating phony account statements.

Last month, Grigg began falsely claiming that his firm could invest client funds in government-guaranteed commercial paper and bank debt as part of the federal TARP program, according to the SEC. He also claimed to have partnerships and other business relationships with several leading U.S. investment firms, the agency said.

Since October, the Treasury has been using most of the bailout money under TARP to buy stock in U.S. banks and other financial institutions, with the idea that cash injections will spur banks to get lending again and ease the credit crunch gripping the economy.

Grigg and his firm “preyed upon investors’ desire for safety by claiming associations with reputable investment firms and the government’s TARP program,” Katherine Addleman, regional director of the SEC’s Atlanta office, said in a statement. “Investors should carefully check any purported affiliations.

In this case, not only were such claims false, but there is in fact no program in which investors can buy debt guaranteed by the TARP program.”

Grigg’s attorney, Mark Pickrell, said in a statement that his client “agreed to entry of the temporary restraining order requested by the SEC, and he looks forward to working to resolve these matters as quickly as possible.”

The office of Neil Barofsky, the special inspector general for the TARP program, assisted the SEC in its investigation.

“The TARP program is an historic effort calling on great sacrifices to the American taxpayer in order to restore confidence in the nation’s financial system,” Barofsky said in a statement Wednesday. “Those who make false claims about the TARP in an effort to defraud individuals or entities for personal gain are squarely within our oversight authority, and we look forward to assisting the SEC in bringing an end to such practices.”