The former chief executive of an investment firm has been sentenced to two years in prison for a “cherry-picking” scheme involving crypto derivatives.
In a new press release, the U.S. Department of Justice (DOJ) says that US-Russian national Peter Kambolin, the founder of Systematic Alpha Management (SAM), operated a $1.6 million cherry-picking scam where he falsely misappropriated favorable trades to himself and dumped losses on his customers.
According to the DOJ, between 2019 and 2021, Kambolin operated his firm in a way that allocated the profits generated from futures contracts to his own account while the losses were diverted to his customers’ accounts.
“During the relevant period, Kambolin executed trades for pool participants together with trades he executed on behalf of his proprietary accounts, and fraudulently allocated the profits and losses of the trades to benefit his own accounts.”
Furthermore, authorities say Kambolin defrauded investors by lying to them about what trading strategies SAM would deploy and used their money to fund personal expenses, such as rent for a luxury apartment.
“Kambolin also misrepresented to his clients that SAM employed trading strategies focused on cryptocurrency futures contracts and foreign exchange futures contracts, when in reality, approximately half of Kambolin’s trading in each pool involved equity index futures contracts.”
Kambolin pleaded guilty to one count of conspiracy to commit commodities fraud on October 13th, 2023. He was sentenced to two years in prison last week, according to the press release.
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The post Former CEO Sentenced to Two Years Behind Bars for ‘Cherry-Picking’ Scheme Involving Crypto Futures Contracts appeared first on The Daily Hodl.
