Industry insiders have no doubt noticed this summer's big trend: Racing-based mutual fund advisors are feeling the regulatory heat.

Earlier this summer, the SEC busted the advisor for a NASCAR-based fund for records violations. Today the SEC charged Summit Wealth Management and its principal, Angelo Alleca, with operating a Ponzi scheme using client funds meant for a private fund and two hedge funds. The SEC says that Alleca bilked his high-net-worth clients out of $17 million.

Alas, the racing-fund world is not untouched by this scandal. A deep dive down the regulatory-paperwork rabbithole reveals that Summit Wealth Management is the former advisor for the StockCar Stocks Mutual Fund, a racing-based fund that liquidated last summer. This is the same fund whose other former advisor, Peak Wealth Opportunities, was charged with records violations last month.

The StockCar Fund invested in companies that supported the NASCAR Sprint Cup series, according to a filing. Alleca and Summit Wealth Management advised the fund from 2004 through April 2008, when it transferred the management, distribution, and administration of the fund to Peak Wealth Opportunities.

In its pre-lawsuit heyday, the fund managed $4 million, according to a schedule of holdings.

Now, Alleca is accused of using his clients' cash to trade on the stock market, losing millions, starting two further hedge funds to raise more money to cover up his losses, and then losing that money on market, too.  

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