Chicago City Wire

The Chicago Board Options Exchange (Cboe) has not responded to a formal complaint requesting an investigation into alleged attorney misconduct related to financial irregularities at Belvedere Trading. The announcement was made in a formal complaint letter.

William Carlson, founder of Belvedere Trading LLC, submitted a formal complaint to Cboe Global Markets alleging that Mark Francis Duffy, a former director at Cboe, failed to act on evidence of financial misconduct at Belvedere Trading. Despite the complaint's submission, Cboe has not publicly acknowledged or responded to the allegations. According to Cboe's regulatory complaint procedures, submissions are reviewed to determine if further action is necessary, but no such determination has been communicated in this case.

In a 2015 appellate court decision, it was documented that Carlson founded Belvedere Trading in 2002, investing his life savings of $405,000. Later, partners Thomas Hutchinson and Owen O'Neill joined, investing $85,000 and $160,000 respectively. In 2008, Carlson sold his interest in Belvedere for $17.5 million but later claimed the value should have been higher, leading to legal disputes over the firm's valuation and internal financial practices.

Belvedere Trading LLC has faced disciplinary actions from Cboe Exchange, Inc. In a 2022 decision, the firm was censured and fined $185,000 for violations related to supervision and adherence to law as per Cboe Rules 8.2 and 8.16 and Rule 204 under the Exchange Act. The matter originated from a self-report by Belvedere followed by an examination by FINRA's Department of Member Supervision.

Cboe Global Markets operates several U.S. and international securities and derivatives exchanges including the Chicago Board Options Exchange. The company is subject to regulatory oversight and has faced both regulatory inquiries and enforcement actions over compliance and supervision issues in recent years according to regulatory records published on its website.