William "Bill" Carlton pleaded guilty to securities fraud on September 17, 2026, in connection with a years-long scheme in which he allocated profitable trades to his own accounts while assigning losing trades to client accounts, according to the U.S. Department of Justice.
Carlton engaged in the fraudulent trade-allocation practice, commonly known as "cherry-picking," from at least January 2015 through August 2022. Prosecutors allege that Carlton used an omnibus trading account to delay allocating trades until after he could determine whether they were profitable, keeping many of the winning trades for himself while assigning losing trades to his clients.
The Justice Department reported that approximately 70% of the trades Carlton allocated to his own accounts generated same-day gains, compared with only approximately 16% of the trades allocated to client accounts. According to prosecutors, Carlton obtained approximately $6 million in gains through the scheme while causing losses to numerous clients. Carlton is scheduled to be sentenced on January 27, 2027.
Kurta Law has represented multiple investors harmed by Carlton's conduct and has recovered millions of dollars on behalf of its clients. "Carlton's clients entrusted him with their savings and expected him to manage their investments in their interests. Instead, he has admitted to a scheme that allowed him to benefit from winning trades while his clients were left with losing ones," said Jonathan Kurta, founding partner of Kurta Law. "We have represented multiple investors affected by Carlton's conduct and recovered millions of dollars on their behalf. We believe other former clients should carefully review their accounts to determine whether they may have suffered losses from the same trading practices."
The Securities and Exchange Commission began investigating Carlton's trading practices in 2022, and Cetera Advisors terminated his association with the firm in December 2023. In 2024, the SEC announced settled proceedings involving First Allied Advisory Services, Inc. and Cetera Investment Advisers LLC concerning supervisory and compliance failures related to Carlton's trade allocations. The firms resolved the SEC proceedings without admitting or denying the SEC's findings.
Former Carlton clients may have potential claims. Investors who maintained accounts with William "Bill" Carlton or Carlton Wealth Management through First Allied or Cetera may wish to have their trading history reviewed to determine whether their accounts were affected by the conduct described by federal prosecutors. Kurta Law represents investors nationwide in securities arbitration and investment fraud matters, including claims involving broker misconduct and failures by brokerage firms to reasonably supervise their financial professionals.
The case underscores the importance of investor vigilance and the role of legal recourse in addressing securities fraud. With Carlton's sentencing pending, the full impact on victims and the financial industry remains to be seen. The Department of Justice's press release on the guilty plea can be found via Former Investment Adviser Pleads Guilty to Cherry-Picking Scheme, and additional details are available through Kurta Law.
