A San Diego, Calif.-based broker-dealer will pay $1.95 million to settle allegations by the U.S. Securities and Exchange Commission that it failed to reasonably supervise a former employee charged with fraud.

The U.S. Securities and Exchange Commission received an emergency court order to shut down an alleged Ponzi scheme targeting retirees in California and Illinois it says took in $20 million with only $900,000 currently in the possession of the alleged perpetrators.