William D. Carlton

Attorneys at ChapmanAlbin are investigating the actions of William D. Carlton, a former investment adviser who has been charged by the SEC with operating a long-running “cherry-picking” scheme, defrauding his clients of millions of dollars while benefiting himself.

Between January 2015 and August 2022, Carlton engaged in a fraudulent trade allocation scheme commonly referred to as “cherry-picking.” Carlton placed stock trades in his personal accounts and waited to see whether the stock prices increased or decreased throughout the day. If the prices increased, Carlton sold the shares and kept the profits for himself. However, if the stock prices decreased, he allocated the unprofitable trades to his clients’ accounts, avoiding losses while his clients bore the brunt of his poor trades.

Carlton’s scheme resulted in approximately $5.3 million in illicit gains for himself while causing his clients to suffer over $6.4 million in losses. His personal accounts consistently earned positive first-day returns, whereas his clients’ accounts experienced negative first-day returns for over seven years. Carlton’s practice of allocating profitable trades to himself and unprofitable trades to his clients violated his fiduciary duty to act in the best interest of his clients.

The SEC has filed a complaint against Carlton, charging him with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The complaint alleges that Carlton knowingly defrauded his clients through this deceptive trade allocation scheme. The SEC is seeking a permanent injunction, disgorgement of ill-gotten gains, and civil penalties against Carlton.

If you or someone you know was a client of William D. Carlton and suffered financial losses due to his fraudulent actions, contact ChapmanAlbin today. Our experienced attorneys can help you recover your losses and provide a free consultation to evaluate your case.