WASHINGTON (Reuters) ? US securities regulators charged three former Refco Securities brokers and three others with scheming to ?clobber? the shares of a software company through extensive short-selling.

The US Securities and Exchange Commission filed fraud charges against Andreas Badian, who worked for Rhino Advisors Inc., an unregistered investment adviser, and three former Refco brokers Jacob Spinner, Mottes Drillman and Jeffrey Graham.

The case involves Sedona Corp., a King of Prussia, Pennsylvania-based company, and a $2.5 million loan from Amro International SA, a client of Rhino, according to the SEC?s civil lawsuit.

The lawsuit is the second involving stock manipulation charges involving Sedona?s stock. In February 2003 Badian?s brother, Thomas, and Rhino agreed to pay $1 million to settle similar charges of short-selling, which is taking a position that the price of a stock will fall.

Under the loan agreement, Amro was allowed to convert Sedona debt securities to Sedona shares under certain conditions but was prohibited from short-selling Sedona stock, the SEC said.

Amro, which is headquartered in Zurich, Switzerland, provides convertible and equity financing to companies strapped for cash.

Marc Ross, the attorney representing Spinner and Drillman, said his clients were not involved in any alleged improper trading activity. ?Our clients intend to vigourously defend this action to prove they did nothing wrong,? Ross said.

SEC enforcement attorneys allege in their lawsuit that Badian illegally directed Spinner, Drillman and Graham to sell short ?massive amounts of Sedona stock with ?unbridled levels of aggression? intending to ?clobber? Sedona?s stock price until it ?collapsed?.?

During March 2001, 40 percent of all trading in Sedona stock was directed by Badian and the price of Sedona?s shares plummeted to 75 cents per share from an average of $1.43 per share, the SEC said.

?Notwithstanding this prohibition, Badian engaged in a scheme of extensive short selling of Sedona?s shares in violation of this agreement and federal securities laws,? the SEC said in its complaint.

The SEC said those trades were carried out using accounts the individuals controlled at Refco Securities and Pond Equities Corp., a registered brokerage firm that has been censured and fined by NASD, the brokerage industry?s regulator, on several occasions.

Refco , once a leader in world markets for derivatives such as commodity and financial futures, filed for bankruptcy protection in October 2005 in the wake of an accounting scandal.

The SEC?s lawsuit also names Pond Equities and its president, Ezra Birnbaum, and its chief compliance officer, Shaye Hirsch, who were both accused of failing to properly supervise Spinner and Drillman, who were also working at Pond at the time of the alleged wrongdoing.

Lawyers for Pond, Birnbaum, Hirsch and Badian were not immediately available for comment. Graham?s attorney declined to comment.