© Reuters. Deceptive ‘Cherry-Picking’ Crypto Scam Results In 2-Year Jail Term For Investment Firm CEO
Benzinga – The CEO of an investment firm has been handed a two-year prison term by United States authorities for his role in a fraudulent cryptocurrency scheme.
What Happened: Peter Kambolin, the executive of Systematic Alpha Management, was found guilty of conducting a “cherry-picking” scam that cheated investors by misallocating profitable trades.
The United States Department of Justice (DoJ) said, “Kambolin defrauded investors located in the United States and abroad by, among other things, depriving them of profitable trades.”
In the fraudulent activity described as “cherry-picking,” Kambolin would gather funds from investors, promising to execute trades on their behalf. He would, however, only distribute the trades between the investors and his own accounts after determining their success, ensuring his accounts benefited from the profitable outcomes.
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The statement from the DoJ explains, “During the relevant period, Kambolin executed trades for pool participants together with trades he executed on behalf of his proprietary accounts, and fraudulently allocated the profits and losses of the trades to benefit his own accounts.”
Cherry picking involves carrying out trades without initially assigning them to specific accounts, a decision made only…