How an Award-Winning Fund Manager Rigged the Game to Steal His Clients’ Profits

The Cherry-Picker

To the outside world, Peter Kambolin and his firm, Systematic Alpha Management (SAM), were a picture of success. Based out of a sunny high-rise in South Florida, they won industry awards and marketed themselves as a sophisticated, algorithm-driven trading powerhouse.

They promised investors “positive absolute returns” through complex strategies in cryptocurrency and foreign exchange futures. People, including individuals and institutional asset managers, trusted them with their money.

But behind the curtain of industry accolades and slick marketing, Kambolin was running a rigged game. For nearly three years, he operated a fraudulent scheme that systematically siphoned profits away from his customers and into his own pockets. He wasn’t the genius algorithm trader that he depicted himself to be as. He was a cherry-picker, and his naively trusting clients were footing the bill for every losing bet.

Heads I Win, Tails You Lose

The scheme was both simple and deeply deceptive.

Kambolin managed several “commodity pools”—think of them as investment clubs—for his clients. He also managed “proprietary accounts” for himself, his family, and his own companies. Instead of placing trades for each account separately, he used a common industry practice called “bunched orders.” He would place large trades for everyone at once in a temporary “suspense account” and then, at the end of the day, tell his brokers how to “allocate” or distribute those trades among the various accounts.

This practice is actually perfectly legal, but it comes with one ironclad rule from regulators: the allocations must be “fair and equitable.” You can’t consistently give favorable trades to one account while sticking another with the losers.

Except that was precisely what Kambolin did.

Because he waited until the end of the day to allocate the trades, he already knew which ones had made money and which ones had lost money. With this perfect hindsight, he would instruct his brokers to move the winning trades into his proprietary accounts.

The losing trades? He dumped those on his unsuspecting customers.

It was a classic “heads I win, tails you lose” setup.

The results were staggering.

Over the 34 months of the scheme, Kambolin’s proprietary accounts were profitable 91% of the time, raking in over $1.6 million. Meanwhile, the customer accounts that received the losing trades were profitable only 9% to 20% of the time, suffering combined net losses of over $1.2 million.

Betrayal Backed by Lies

This wasn’t just a quiet fraud happening in the background. It was an active betrayal reinforced by blatant lies. In the official documents given to investors, Kambolin promised he would “act in a manner that it considers fair and equitable in allocating investment opportunities.” This was a direct, written promise that he violated nearly every single day.

He also lied about his trading strategies. He marketed a “Cryptocurrency Pool” that supposedly focused on crypto futures, but in reality, nearly half of its trades were in entirely different markets, like equity index futures—the very markets where he was busy cherry-picking the losers for their account.

He sold his clients on a specialized, cutting-edge strategy while using their money as cannon fodder in a rigged allocation game.

The ripple effect was devastating. Customers lost over $1.2 million, not because the market went down, but because their own fund manager was actively working against them, treating their accounts as a dumping ground for his bad trades. The trust they placed in an award-winning, registered professional was systematically betrayed for personal gain.

A Pattern of Harm

A Duty Betrayed

This case here exposes a fundamental vulnerability in the investment management world. Commodity pool operators and trading advisors like Kambolin have what’s called a fiduciary duty to their clients. That’s a fancy term for a simple concept: they must act in their clients’ best interests, not their own.

Kambolin’s scheme was a complete demolition of that duty.

he “so what” of this case is that it shows how easily the tools of the trade—like bunched orders and suspense accounts—can be turned into weapons against clients if not policed by strong internal controls and aggressive regulators.

The system of post-trade allocation is built on the honor system, and Kambolin proved that honor can be in very short supply when millions of dollars are on the line.

Prison and Payback

The law finally caught up with Peter Kambolin. His scheme unraveled under the scrutiny of the Commodity Futures Trading Commission (CFTC), leading to both civil and criminal charges.

The accountability has been significant. In his criminal case, Kambolin pleaded guilty and was sentenced to 24 months in federal prison. And in this civil case, the consequences are equally severe:

• Payback: He and his firm must pay back every cent of their ill-gotten gains ($1,633,119 in disgorgement) and cover all of his clients’ losses ($1,208,503 in restitution).
• Bans: He is banned from trading for himself for six years and is permanently barred from managing other people’s money, soliciting funds, or registering with the CFTC ever again.

Real Solutions: Transparency and Enforcement

While this case ended with a conviction and a hefty penalty, it also underscores the need for constant vigilance.

The solution to preventing the next Peter Kambolin lies in two key areas. First, investment firms must have strict, auditable, and transparent trade allocation policies. The “honor system” is not enough. Second, regulators like the CFTC must continue to use advanced data analytics to spot these unfair allocation patterns and bring swift, decisive enforcement actions.

For us normies looking for places to park our cash, the lesson is crystal clear: even award-winning, registered professionals can be crooks. Diligence, skepticism, and a clear understanding of how your money is being managed are your best defenses in a world where the game can sometimes be rigged.

All factual claims in this article are sourced from the United States District Court for the Southern District of Florida Consent Order in Commodity Futures Trading Commission v. Systematic Alpha Management, LLC, and others, Civil Action No. 23-21527-Civ-Scola, entered September 4, 2025.

Press release from the CFTC website can be found at this following link: https://www.cftc.gov/PressRoom/PressReleases/9127-25