Ex-CEO of Investment Firm Admits to Crypto Futures Fraud, Faces Five Years in Prison
Summary:
Former CEO of Miami-based investment firm, Peter Kambolin, admitted to a conspiracy involving commodities fraud related to cryptocurrency futures contracts, according to the U.S. Department of Justice. Kambolin's "cherry-picking" scheme involved false representations about his trading activities and deprived investors both in the U.S and internationally of profitable trades. Proceeds were used for personal expenses and transferred to foreign accounts. Upon his confession, Kambolin faces a possible five-year imprisonment sentence. The sentencing date has not been disclosed.
The ex-chief executive of a Miami-based investment firm, Systematic Alpha Management (SAM) LLC, Peter Kambolin, has admitted to a conspiracy of commodities fraud related to cryptocurrency futures contracts. His actions could lead him to up to five years behind bars. As per an announcement by the U.S. Department of Justice on October 12, Kambolin was involved in a "cherry-picking" scheme. He promoted his firm as a place for algorithmic trading strategies involving futures contracts, encompassing cryptocurrencies and commodities. Yet, Kambolin falsely presented to his investors that his portfolio included cryptocurrency futures and foreign exchange futures. But in truth, about half of his trading in each pool featured equity index futures contracts.
Dishonestly, Kambolin deprived his investors in the U.S. and other countries of profitable trades under his scheme. Cherry picking refers to a deceptive securities trading practice wherein trades are conducted without assigning them to a specific trading account until the trader can see if the trade will be profitable or not.
Furthermore, the DOJ stated that Kambolin deceived his investors both domestically and globally by robbing them of lucrative trades and then used the earnings to cover his personal expenditures, which included the lease for a luxury beachfront apartment.
The earnings he collected from his scheme were sent to foreign bank accounts which were managed by an accomplice located in Belarus and Dominica. Shimon Richmond, the Assistant Inspector General for Investigations, acknowledged the importance of holding the guilty party accountable for deceiving and defrauding investors through such a scheme and using the scheme's proceeds to maintain his own lavish lifestyle following Kambolin's admission of guilt.
Kambolin now faces the possibility of a five-year prison term at most. The date for his sentencing hearing is yet to be announced.
Published At
10/13/2023 1:00:57 AM
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