Chicago City Wire

William C. Carlson, founder of Belvedere Trading LLC, has alleged significant financial misconduct within the company he established. According to a forensic report by Robert Cooper CPA, major losses of ownership and acts of federal crime concealment were identified, which Carlson claims go beyond malpractice. This statement was made in an affidavit.

"I alone was responsible for Belvedere Trading LLC becoming a CBOE member firm," said Carlson. "The basis for such an investigation arises from a forensic report prepared by Robert Cooper CPA in 2010 that was paid by me as a client expense but was withheld from me until recently brought to my attention by Mr. Cooper himself. This report is vital to understanding the Belvedere Trading LLC story and it demonstrates that I was deprived of approximately 35 million dollars of my ownership interest in Belvedere. Shielding federal crimes and criminal fraud is completely different from ordinary legal malpractice."

The Robert Cooper CPA Forensic Report scrutinized internal financial records at Belvedere Trading LLC, revealing potential discrepancies in profit allocation and ownership valuation. The report's release led to arbitration initiated by Carlson and Willis Capital, who allege that Belvedere’s partners concealed the firm's true value before Carlson sold his stake in 2008 for $17.5 million—an amount significantly lower than later valuations. This dispute has heightened legal scrutiny, resulting in Illinois appellate filings and increased attention from the Chicago Board Options Exchange (CBOE) and the Financial Industry Regulatory Authority (FINRA) regarding member firm transparency and self-regulatory oversight.

According to expert Rona Seams, the Cooper report determined that as of March 1, 2008, Carlson’s "uncompensated value based on 2007 Belvedere financials is more than $49.8 million," nearly three times the $17.5 million he received when selling his ownership interest. This discrepancy forms the basis of Carlson’s claim for fraud and breach of fiduciary duty.

Between 2020 and 2023, firms administered by CBOE—including Belvedere—faced multiple disciplinary actions with fines totaling over $217,500. Notably, this includes an $185,000 fine in 2024 for violations of short sale closing-out rules under Regulation SHO. Belvedere received at least three citations from CBOE and its subsidiaries during this period, with fines ranging from $5,000 to $185,000 for issues related to supervision, trade reporting, and compliance.

Carlson founded Belvedere Trading LLC in 2002 with $405,000 of personal capital and initially held sole ownership. After stepping aside due to health reasons in 2006, he alleges that his former partners deliberately withheld financial data during the 2008 sale process and failed to disclose a confidential valuation to CBOE during a 2007 arbitration. His legal complaints argue that this concealment resulted in materially undervalued compensation and that CBOE arbitrators overlooked these discrepancies when dismissing early appeals.