The Securities and Exchange Commission filed a complaint in federal court in Florida against Michael D. Williams and his business, Check Mate Investments Capital, alleging Williams defrauded at least 18 investors of about $860,000. Many of the investors were current or former law enforcement members, the commission said.
Williams solicited investments for two CMI funds he never incorporated between October 2023 and August 2024, the complaint said. He claimed the funds would trade stock options, crypto assets and S&P 500 equities. Williams was never registered as an investment adviser.
The SEC alleged Williams told investors he would manage the funds with little risk using a strategy that generated year-over-year returns exceeding 187%. In reality, he never opened a brokerage account for CMI Capital, the commission said. He based his claims on his personal trading history, which was consistently marked by year-over-year losses.
Williams used phone calls, texts, emails, in-person meetings and social media to solicit investors, the complaint said. Many of the law enforcement victims trusted Williams because of his work with a West Palm Beach-based police and firefighter pension plan administrator. He often asked them to refer friends and family, many of whom were not accredited investors, the SEC said.
Williams sent investors fake profits and portfolio values in monthly reports or on social media, according to the commission. He posted cropped screenshots of returns from a practice trading platform to a Facebook group chat for CMI Capital investors, the complaint said. Stephanie N. Moot, director of the SEC's Miami Regional Office, said Williams tricked investors by sending them cropped screenshots of graphics that showed exorbitant trading profits.
Williams used about 45% of the total funds for his own use, the SEC said. The expenses included credit card and mortgage payments, cash withdrawals, a high-end sports car, luxury car rentals, jewelry, luxury goods, vacations, restaurants and medical spa treatments, according to the complaint.
In August 2024, investors realized the fund returns Williams touted were from a simulated trading account and began questioning his assertions, the commission said. Williams attempted to offer repayment to some investors and has returned at least $375,000 of investor funds, largely using funds provided by his family. In settling some of the charges, Williams agreed to a forthcoming associational bar and to disgorgement and civil penalties to be decided later.