The SEC has charged Michael D. Williams and CMI Capital LLC with allegedly raising approximately $860,000 from at least 18 investors through misleading claims about two investment funds. Many of the investors were current or retired law enforcement officers in South Florida who knew Williams through his work for a third-party police and firefighter pension plan administrator.

The case centers on the information investors received about fund performance, the use of their money, and the trust Williams had built through a separate professional role. The charges are allegations; the proposed settlement remains subject to court approval.

The Performance Claims at the Center of the Case

According to the SEC’s complaint, Williams solicited investments in two funds he controlled between at least October 2023 and August 2024. He allegedly told investors that one fund held a portfolio worth more than $5 million and had achieved returns exceeding 140 percent.

The SEC also alleges that the defendants sent investors cropped screenshots of graphics showing exceptionally high trading profits. A screenshot may appear to document a result, but its value depends on what it shows, what it omits, and whether the underlying trades and account balances can be verified. Here, the SEC contends that the materials formed part of a misleading investment pitch.

Why the Existing Relationship Matters

Williams’s work for a third-party pension plan administrator gave him a connection to the law enforcement community. The SEC alleges that many investors trusted him because of that role.

A professional relationship can provide an introduction to a prospective investor. It does not establish that a separate fund is affiliated with the organization through which the relationship arose, or that the organization has reviewed its performance or approved the investment. For anyone presenting an opportunity to colleagues, clients, or a professional community, those distinctions should be clear from the outset.

Alleged Use of Investor Funds

The complaint alleges that Williams used approximately $384,000 of investor and client funds for personal expenses, including credit card balances, a sports car, and vacations.

The SEC states that Williams began repaying certain investors in August 2024 and has since repaid more than $375,000 to certain investors. Repayment is relevant to the case, but it does not answer whether the original solicitation was truthful or whether the funds were used as represented.

The Securities Law Claims

The SEC charged Williams and CMI Capital, which also did business as Check Mate Investments, with violating antifraud and registration provisions of the Securities Act of 1933. The complaint also alleges violations of antifraud provisions of the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

Those claims address different parts of the investment relationship: the manner in which interests were offered, the statements made to investors, and conduct involving client funds. An operator evaluating a fund raise therefore needs to consider more than whether its offering qualifies for an exemption. The accuracy of its pitch and its handling of investor money remain separate obligations.

Where the Case Stands

Williams and CMI Capital have agreed, without admitting the complaint’s allegations, to proposed judgments that would permanently enjoin further violations of the charged provisions. The proposed judgments would also restrict Williams’s participation in securities transactions, subject to exceptions for certain activity in his personal accounts.

The court would determine the amounts of disgorgement, prejudgment interest, and civil penalties. Williams has also agreed to a forthcoming associational bar. None of those proposed court-ordered terms is final until approved by the court.

What This Means for Fund Operators and Investors

For fund operators, claims about returns and portfolio value should be supported by complete, consistent records that can withstand scrutiny beyond a presentation or screenshot. Investor materials should also explain who operates the fund, how assets are held, and how proceeds will be used.

For investors, a trusted introduction is a reason to ask informed questions, not a substitute for answers. The SEC’s allegations show why it matters to verify reported performance and understand the relationship between the person soliciting an investment and any organization associated with that person.

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This blog post is for informational purposes only and is not legal advice. Please consult with a Launch Legal attorney regarding your specific situation.