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DOJ charges exec over ‘cherry picking’ scheme involving crypto futures

Press Releases Crypto News Cointelegraph DOJ charges exec over ‘cherry picking’ scheme involving crypto futures

The former CEO of a Miami-based investment firm has pled guilty to a conspiracy to commit commodities fraud involving crypto futures contracts and now faces up to five years in prison.

In an Oct. 12 statement, the United States Department of Justice said that Peter Kambolin, the former CEO of Systematic Alpha Management (SAM) LLC, operated a “cherry picking” scheme where he marketed his firm as offering algorithmic trading strategies involving futures contracts, including both cryptocurrencies and commodities.

However, Kambolin misrepresented to investors that his fund involved the trading of cryptocurrency futures and foreign exchange futures, when in reality, roughly half of Kambolin’s trading in each pool involved equity index futures contracts.

CEO Pleads Guilty to Transnational Scheme Involving Foreign Exchange and Cryptocurrency Futures Contractshttps://t.co/aiafUgfRS3

— Criminal Division (@DOJCrimDiv) October 12, 2023

“In doing so, Kambolin defrauded investors located in the United States and abroad by, among other things, depriving them of profitable trades,” wrote the prosecutors.

Cherry picking is a fraudulent securities trading practice in which a person executes trades without assigning those trades to a particular trading account until the individual determines whether or not the trade has become profitable or suffered losses.

According to the DOJ, Kambolin defrauded investors both in the United States and abroad by depriving them of profitable trades and then using the proceeds to fund his own personal expenses including the rent for a beachfront apartment.

The proceeds of his scheme were transferred to foreign bank accounts controlled

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Author: Tom Mitchelhill

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