Peter Kambolin, former owner and CEO of Systematic Alpha Management LLC, pleaded guilty to a "cherry-picking" scheme. Kambolin fraudulently misappropriated profitable trades to himself and left his investors with substantial financial losses.
"Algorithmic trading techniques for speculative financial assets like cryptocurrency and futures contracts are one of the services that Systematic Alpha Management advertises as being available to its clients. He tried to line his own pockets instead of giving value to the clients who were paying him, which was unethical. Kabmolin engaged in a fraud known as "cherry picking" between January 2019 and November 2021. In this scheme, he gave the impression to investors that Systematic Alpha Management utilized trading methods that were concentrated on bitcoin futures contracts. However, this was not the case. A little less than half of the entire volume in each pool was made up of equity index futures contracts. As a consequence of this, he was in a position to enrich himself financially at the expense of his customers.
Nicole M. Argentieri, who is serving as the interim assistant attorney general in charge of the criminal division, has made the following statements: "The defendant breached client confidence for personal profit. This behavior affects investor confidence in the commodities market." The Department of Justice has made it abundantly plain in its response to this petition that it will not tolerate financial advisors placing their personal interests, such as cherry-picking transactions, ahead of the interests of their customers in any way, shape, or form. In addition to this, it displays the Department of Justice's commitment to pursuing criminal activity in the financial sector through the use of data analytics.
"The defendant must be held accountable for his actions in misleading and defrauding investors through a cherry-picking scheme, and using proceeds from the scheme to fund his own personal lifestyle," said Assistant Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation's Inspector General. "Yesterday's plea recognizes the importance of holding the defendant accountable for his actions in misleading and defrauding investors through a cherry-picking scheme," said Richmond. The FDIC Office of Inspector General "remains dedicated to working with our law enforcement partners to protect investors and the nation's banking system from individuals who conduct such heinous financial crimes."
On a charge of conspiring to commit commodity fraud, Kambolin admitted to having committed the crime. It is possible that he will serve a prison sentence of up to five years. Following consideration of legislative requirements as well as the United States Sentencing Guidelines, a judge in a federal district court will decide on an appropriate punishment.
