The former CEO of an investment firm admitted to participating in a “cherry-picking” scheme regarding cryptocurrency futures and foreign exchange contracts.
This practice caused losses to investors, as the former CEO used the proceeds of the scheme for personal use.
Fraudulent cherry picking practice
Founder and former CEO of investment firm Systematic Alpha Management LLC (SAM), Peter Campolin, who worked between 2019 and 2021 as a commodity trading advisor and commodity pool operator, engaged in a practice called cherry picking, according to press release By the US Department of Justice.
As stated in the ad, Campolin’s selection system enabled him to fraudulently allocate profitable and unprofitable trades in a way that benefited the former CEO’s accounts while incurring losses to investors.
Also, Kambolin misled clients into believing that SAM’s trading strategies focused on cryptocurrency futures and foreign exchange futures. In fact, about 50% of the former executives’ transactions in each group “involved stock index futures contracts.”
According to the Department of Justice, Campolin’s actions meant he defrauded clients inside and outside the United States while preventing investors from making profitable trades.
Kambolin allegedly made approximately $1.5 million in trading profits
Formerly Commodity Futures Trading Commission (CFTC). File a complaint against Sam and Campolin, making similar accusations against the company and its CEO. The CFTC alleged that Campolin and his investment firm unfairly allocated profitable trades to their own accounts while pool participants received unprofitable trades.
According to the complaint, Kambolin and SAM defrauded pool participants out of trading profits of more than $1.5 million, while incurring clients in trading losses of more than $1.5 million.
In its press release, the Justice Department said the former SAM CEO used profits from the fraudulent cherry picking scheme to fund his lifestyle, which included renting a beachfront apartment while also funneling the proceeds into Belarusian and Dominican bank accounts controlled by his co-conspirator. .
Commenting on the matter, Acting Assistant Attorney General Nicole Argentieri said Campolin “violated a customer’s trust for personal gain,” adding that his conduct “undermines investor confidence in the commodity market.”
The former CEO pleaded guilty to conspiracy to commit commodity fraud and could face a maximum sentence of five years in prison. However, a sentencing date has not been set.
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