The CEO of an investment management firm was sentenced to prison for fraudulently misappropriating profitable trades to himself, at the expense of investors, according to the U.S. Department of Justice (DOJ).
Peter Kambolin, 48, a U.S.-Russian national from Sunny Isles Beach, Florida, was sentenced to two years in prison followed by one year and six months of home confinement. He was also ordered to forfeit approximately $1.6 million for this scheme. He is the owner and CEO of Systematic Alpha Management LLC (SAM), a firm established in 2007 that offers algorithmic trading strategies involving futures contracts.
Between January 2019 and November 2021, Kambolin, who at the time was a commodity trading advisor and a commodity pool operator, engaged in a “cherry-picking” scheme where he fraudulently allocated profits and losses from futures trades in a manner designed to benefit his own accounts unfairly at the expense of his clients.
Further, the DOJ said Kambolin misrepresented to his clients that SAM employed trading strategies focused on cryptocurrency futures contracts and foreign exchange futures contracts. In reality, approximately half of Kambolin’s trading in each pool involved equity index futures contracts. Kambolin defrauded investors by, among other things, depriving them of profitable trades. Also, Kambolin used the proceeds of the scheme to fund personal expenses, including rent for a beachfront apartment, and transferred proceeds to foreign bank accounts his co-conspirator controlled in Belarus and Dominica.
Kambolin pleaded guilty on Oct. 11, 2023, to one count of conspiracy to commit commodities fraud.
The Commodity Futures Trading Commission previously charged Kambolin and SAM by complaint.
Trial Attorney Matt Kahn of the Criminal Division’s Fraud Section prosecuted the case.