Chicago City Wire

William C. Carlson, founder and former Managing Member of Belvedere Trading LLC, has alleged that individuals involved in the firm's purported misconduct were closely connected to the Chicago Board Options Exchange (Cboe). This statement was made in a public filing.

"CBOE Director Mark Duffy was very involved with this CBOE and Belvedere Trading LLC matter," said Carlson. "Belvedere wrongdoers are all mostly CBOE members and Belvedere Trading LLC is a CBOE member firm. Entire Belvedere Trading LLC matter was described with documentation in 2011 and beyond and he has been fully involved since. All are very involved with this entire Belvedere Trading LLC matter and the Belvedere criminal fraud and criminal conduct."

In June 2025, Carlson publicly accused his former company of a $35 million equity fraud scheme that allegedly occurred between 2006 and 2008. According to Carlson, during this period, company partners and employees initiated unauthorized multi-million-dollar wire transfers, concealed forensic findings, and orchestrated a cover-up reportedly involving Cboe director Mark Francis Duffy. He asserts these actions were documented in a 2010 Certified Public Accountant (CPA) forensic audit by Robert Cooper and emerged in late 2024. These actions are tied to potential federal crimes, prompting a police filing and request for formal regulatory and law enforcement investigation. According to Chicago City Wire, economic crime of this magnitude would violate multiple federal statutes, underscoring possible systemic oversight failures within both Cboe and Belvedere.

Carlson’s complaint to the Chicago Police Department in June 2025 alleges "large illegal wires" orchestrated by then-office manager Sheryl Peven. The allegations state that seven-figure sums were transferred to new accounts and allegedly to insiders’ wives. The filings further charge that Cboe Director Mark Duffy received briefings on these transactions as early as 2011 but did not initiate regulatory or legal follow-up, implying board-level involvement at Cboe in the alleged concealment.

Carlson also claims that Duffy was compensated $15,000–$20,000 in 2011 to review Belvedere’s internal improprieties yet declined to act against clear evidence of unauthorized equity and ownership transfers. His complaint with the Attorney Registration & Disciplinary Commission (ARDC) contends that this inaction and acceptance of compensation potentially amounts to an exchange insider facilitating a cover-up rather than enforcing compliance. Financial misconduct at this level raises concerns about conflict-of-interest and Self-Regulatory Organization (SRO) oversight failures.

Carlson founded Belvedere Trading LLC in 2002 and held a majority founder stake until 2007 when health issues led to a leadership transition. A forensic CPA audit by Robert Cooper commissioned in 2010 later revealed substantial equity dilution and unauthorized transfers carried out without Carlson’s approval. He has consistently contested the firm in civil and regulatory actions, including appellate court filings in 2015 and police/ARDC submissions in 2025, asserting he was defrauded of approximately $35 million in equity.