US: Peter Kambolin sentenced to 2 years for FX and Crypto scam

Rick Steves

Peter Kambolin used the fraudulent gains for personal expenses and transferred funds to foreign accounts in Belarus and Dominica.

Peter Kambolin, a 48-year-old U.S.-Russian national and CEO of Systematic Alpha Management LLC (SAM), was sentenced to two years in prison followed by 18 months of home confinement.

He was also ordered to forfeit about $1.6 million for conducting a “cherry-picking” scheme. This scheme involved misappropriating profitable trades for himself and assigning losses to his investors.

SAM managed over $720 million in assets by 2011

Kambolin’s firm, established in 2007, managed over $720 million in assets by 2011. From January 2019 to November 2021, he engaged in this fraudulent activity. He was a commodity trading advisor and commodity pool operator at the time. He falsely allocated profits and losses from futures trades to benefit his accounts, deceiving his clients.

Kambolin misled clients about SAM’s focus on cryptocurrency futures and foreign exchange futures contracts. In reality, about half of his trading involved equity index futures contracts. This deception affected investors in the U.S. and abroad, depriving them of profitable trades. He used the fraudulent gains for personal expenses and transferred funds to foreign accounts in Belarus and Dominica.

The scheme involved executing trades for pool participants alongside his proprietary accounts, allocating profits and losses in his favor. Kambolin pleaded guilty to one count of conspiracy to commit commodities fraud on October 11, 2023.

This sentencing follows a previous case from May 2023, where the Commodity Futures Trading Commission (CFTC) charged Kambolin and his businesses for profiting off customers’ losses. This history highlights the ongoing efforts by regulatory bodies to combat fraudulent activities in the trading sector, particularly in emerging areas like cryptocurrency futures.

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