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The CEO of a Florida-based commodities trading firm, Systematic Alpha Management LLC, has been sentenced to two years imprisonment for crypto fraud in the first case involving the cherry-picking of cryptocurrency futures trades.
In April 2023, the US Commodity Futures Trading Commission (CFTC) brought charges against Systematic Alpha Management LLC and its owner and CEO, Peter Kambolin, alleging that they engaged in a fraudulent scheme to allocate profitable futures trades in crypto to their in-house accounts, while sticking clients with losses or less lucrative trades.
“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,” the U.S. Department of Justice (DoJ) said in a release.
See Also: Former IcomTech CEO Sentenced To 5 Years Imprisonment For Wire Fraud
U.S. authorities alleged Kambolin also misrepresented the firm’s trading activities to investors — claiming that the firm used trading strategies focused on crypto futures and foreign exchange futures, when about half of its trading was in equity index futures.
“In doing so, Kambolin defrauded investors located in the United States and abroad by, among other things, depriving them of profitable trades,” the DoJ alleged.
Kambolin pleaded guilty on Oct. 11, 2023, to one count of conspiracy to commit commodities fraud.
After pleading guilty to one count of conspiracy to commit commodities fraud, Kambolin was ordered to serve two years in jail, followed by 18 months of home confinement, and to forfeit approximately US$1.6 million.
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