The former CEO 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 U.S.-Russian citizen Peter Kambolin, the founder of Systematic Alpha Management (SAM), executed a $1.6 million scam, falsely imagining favorable trades has embezzled for himself and dumped losses on his customers.
According to the DOJ, between 2019 and 2021, Kambolin operated his business in a manner that allocated profits from futures contracts to his own account while diverting losses to his clients’ accounts.
“During the relevant period, Kambolin executed trades for pool participants, along with trades he executed on behalf of his own accounts, and fraudulently used the profits and losses from the trades for the benefit of his own accounts.”
In addition, authorities say Kambolin defrauded investors by lying to them about the trading strategies SAM would employ and using their money to finance personal expenses such as renting a luxury apartment.
“Kambolin also misrepresented to its clients that SAM employed trading strategies focused on cryptocurrency futures and foreign currency futures contracts, when in reality approximately half of Kambolin’s trading in each pool was in stock index futures contracts.”
Kambolin pleaded guilty to one count of conspiracy to commit commodities fraud on October 13, 2023. He was sentenced last week to two years in prison, according to the press release.
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