Chicago City Wire

William Carlson, founder of Belvedere Trading, has requested an investigation by CBOE Global Markets, Inc. into allegations of financial loss and misconduct involving Belvedere Trading LLC. This request was articulated in a formal board correspondence.

"Mr. Carlson's uncompensated value, based on 2007 Belvedere financials, exceeds $49.8 million as of March 1, 2008," said Carlson. "If I'm trying to get 20 million (above my capital account)... I could sell this company by end of 2009 for 100m and want a fair settlement accordingly. Claims of "extortion," "shakedown," and "legal sabotage" linked to Belvedere Trading LLC. Evidence confirms these recapitalizations did not occur."

According to Carlson, his dispute with Belvedere Trading and its partners revolves around corporate governance, valuation, and contractual fairness within proprietary trading firms. He founded Belvedere in 2002 using his savings and later accused his partners of concealing a pre-settlement valuation appraisal and excluding him from company records. This exclusion led to a mediated sale at $17.5 million, which he argued was fraudulently low. The case underscores the risks founders face in ill-informed settlements and raises questions about fiduciary transparency.

Carlson initially invested $405,000 of his personal capital via Willis Capital LLC to start Belvedere Trading in 2002, with partners investing $160,000 and $85,000 respectively. By 2008, the company had grown substantially, leading Carlson to agree to sell his ownership interest for $17.5 million in a mediated settlement. However, he later claimed the fair value was $49.8 million. These figures highlight the significant financial stakes and valuation divergence at issue.

Carlson claimed that a Chicago accounting firm had prepared an internal statistical valuation of his one-third stake—estimating it at $49.8 million—but said his partners directed the firm to halt work and did not disclose the appraisal. He did not learn of this until years after settling in 2008, prompting legal action; however, courts deemed his malpractice claims time-barred due to the delay in disclosure.

Carlson is also the founder and principal owner of Willis Capital LLC through which he launched Belvedere Trading LLC in 2002 using his savings. He held a majority stake and managed the firm until health issues in 2005 led his partners Thomas Hutchinson and Owen O’Neill to assume control. Frustrated by perceived exclusion, he initiated arbitration and court actions but later sued his legal counsel for malpractice related to advice during the 2008 settlement; those claims were dismissed.

Belvedere Trading LLC was founded in Chicago in 2002 as a proprietary trading firm focused on S&P 500 index options. Initially holding about 62% ownership while O’Neill and Hutchinson held the remainder, Carlson's absence due to illness shifted management and ownership structure resulting in internal conflict over profit-sharing and valuation according to appellate court documents.