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.
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
Credit: Source link
