The output of new enforcement actions from the Commodity Future Trading Commission (CFTC) has virtually ground to a halt in 2025, with a slowdown that greatly exceeds the slower pace of new Securities and Exchange Commission (SEC) enforcement actions. But, the CFTC Division of Enforcement has not gone away. A commodity trading adviser (CTA) as well as a commodity pool operator (CPO) and its principal, who previously pled guilty to orchestrating a novel cryptocurrency-related fraudulent scheme, have agreed to pay more than $2.8 million as part of a settlement with the CFTC, announced on September 17, 2025.[1] The CFTC’s announcement stated that it had obtained this judgment against Systematic Alpha Management LLC (SAM), the CTA and CPO, and Peter Kambolin, its owner and registered associated person (collectively the “Defendants”). In the parallel criminal case, Kambolin previously pled guilty in October of 2023.[2]
According to the consent order, these Defendants improperly allocated profitable trades between two commodity pools and certain proprietary accounts, misled pool participants, and violated CFTC requirements on trade allocation. The court found from January 2019 through November 2021 that the Defendants marketed SAM as a CTA and CPO offering strategies in exchange-traded cryptocurrency and foreign exchange futures.
The Defendants ran at least two pools but executed those pool trades alongside trades of their proprietary accounts and then allocated the trades across the accounts each day. More specifically, the Defendants consistently directed profitable trades to their own accounts and assigned losing or less profitable trades to the pools, defrauding participants and violating CFTC requirements that customer trades be allocated fairly and equitably. They also misrepresented that the pools would primarily trade cryptocurrency and FX futures. To the contrary, more than half of the trades in question actually involved equity index futures.
Returning to the criminal case and his guilty plea, Kambolin’s case marked the first time that prosecutors brought criminal charges related to cherry-picking against a commodity pool trader focused, at least in part, on digital asset futures. Kambolin was sentenced in January 2024 to two years in prison, followed by three years of supervised release and a year-and-a-half of home confinement. He also was ordered to pay $1.63 million in criminal forfeiture and $1.2 million in restitution. The CFTC consent order specified that money paid toward forfeiture and restitution in the criminal case will be credited dollar-for-dollar toward the civil amounts.
[1] https://www.cftc.gov/PressRoom/PressReleases/9127-25.
[2] https://www.justice.gov/archives/opa/pr/ceo-pleads-guilty-transnational-scheme-involving-foreign-exchange-and-cryptocurrency-futures.
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