SEC Charges CMI Capital and Founder for Law Enforcement Investment Fraud
The settlement binds CMI Capital LLC and founder Michael D. Williams, who raised about $860,000 from at least 18 South Florida investors, to injunctions and disgorgement.
The Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of Florida charging CMI Capital LLC and its founder and manager, Michael D. Williams, with an alleged fraudulent investment scheme that raised approximately $860,000 from at least 18 investors, many of whom are current or retired law-enforcement officers in South Florida.
According to the complaint, from at least October 2023 through August 2024 Williams made numerous false and misleading statements to convince clients to invest in two funds he controlled. Investors were told one fund had a portfolio value of more than $5 million and achieved returns exceeding 140 percent, and were shown cropped screenshots of graphics that purportedly displayed exorbitant trading profits. "We allege that one of the tactics the defendants used to trick investors was to send them cropped screenshots of graphics that showed exorbitant trading profits," said Stephanie N. Moot, Director of the SEC's Miami Regional Office.
Williams allegedly misappropriated approximately $384,000 of investor and client funds for personal expenses, including credit card balances, a sports car, and vacations. He began repaying certain investors in August 2024 and has repaid more than $375,000 to certain investors.
The defendants have agreed to a bifurcated settlement, subject to court approval, that includes permanent injunctions against violating the antifraud and registration provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The settlement also provides for disgorgement with prejudgment interest against Williams, civil penalties against the defendants, and an associational bar that prevents Williams from participating in the issuance, purchase, offer, or sale of any security except for certain personal-account transactions.
Without admitting the allegations, the parties consented to entry of judgments that permanently enjoin the charged conduct and impose the outlined financial remedies.
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