Former CEO of Miami Investment Firm Pleads Guilty to Crypto Futures Fraud Conspiracy
The former CEO of Systematic Alpha Management LLC (SAM) pleaded guilty to a conspiracy to commit commodities fraud involving crypto futures contracts, and he is potentially facing up to a five-year prison sentence.
On October 13, the United States Department of Justice said that Peter Kambolin, the former CEO of a Miami-based investment firm, was charged with operating a “cherry-picking” scheme, which he pleaded guilty to.
Cherry-picking refers to an illicit securities trading tactic in which a trader executes transactions without immediately assigning them to a specific trading account. They do this until they ascertain whether the trades yield profits or losses.
In Kambolin’s case, the scheme involved promoting his company as a provider of algorithmic trading strategies involving futures contracts, including cryptocurrencies and commodities.
However, Kambolin deceived investors by falsely claiming that his fund focused on trading cryptocurrency and foreign exchange futures. In contrast, approximately half of his trading activities in each pool were involved in equity index futures contracts.
As per the Department of Justice (DOJ), Kambolin committed fraud against investors, both domestically and internationally. He withheld profitable trades, diverting the gains for his expenses, such as covering the rent for a beachfront apartment.
An account of a co-conspirator has been linked to the case where he transferred the proceeds of his scheme to foreign bank accounts controlled by the co-conspirator in Belarus and Dominica.
Shimon Richmond, Assistant Inspector General for Investigations said that;
“Yesterday’s plea recognizes the importance of holding the defendant accountable for his actions in misleading and defrauding
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