SEILEZ

IN THE UNITED STATES DISTRICT CO URT

FOR TH E SOUTHERN DISTRICT OF FLO RIDA

M IAM IDIVISIO N

CASE NUM BER:

COM M ODITY FUTURES

TR ADING COM M ISSION,

Plaintiff,

V.

SYSTEM ATIC ALPHA

M ANAGEM ENT,LLC and

PETER K AM BOLIN,

Defendants,

and

JERSEY CITY PARTNERS,LLC

and THOR ENTERPRISES

INTERNATIONAL,INC., )

)

ReliefDefendants. )

)

JURY TRIAL DEM ANDED

1l-Iu.î.-'.t.)'o't .k.a.

ky. r/..jw; r1:'nrj.3- >.. ; ;t.v,w.'y.k-)

. .- . . u. Iuu-Q.

(- .. . . I...

('y.. ' ': !.1

. -... ;

COM PLAINT FOR INJUCTIVE RELIEFg CIVIL M ONETARY

PENALTIES,AND OTHER EQUITABLE RELIEF UNDER

THE COM M ODITY EXCH ANGE ACT AND COM M ISSIO N REGULATIONS

PlaintiffCommodityFuttzresTradingCommission(Etcommission'')allegesasfollows:

1. SUM M ARY

DefendantPeterKambolinCtKambolin'')heldouthiscompany,Defendant

SystematicAlphaManagement,LLCCûSAM''),asasuccessfulcommoditypooloperator

(CtCPO'')andcommoditytradingadvisor($tCTA'').Formorethanadecade,Defendantssolicited

customers,includingbothindividualsandinstitutionalassetm anagers,eithertocontributeto

com m oditypoolsoperatedby SAM orauthorizeSAM totradefundsin amanaged account.

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 1 of 37
Defendantsm arketedSAM asofferingcustom ersafully-autom ated, algorithm -basedtrading

strategyinvolvingfutlzrescontractsthatpum ortedlyofferedcustom ersreturnsthatwerenot

correlatedtotraditionalinvestm ents.Defendantscultivated astrongreputationforSAM 'S

tradingasaCTA andCPO,wirminganumberofawardsfrom avarietyofindustrypublications.

2. However,beginningasearlyasJanuary2019throughNovember2021(the

çRelevantPeriod''),Defendantsfraudulentlyallocatedtradesbetween:(1)twocommodity

pools,theCryptocurrencyPoolandtheFX Pool(detinedinSectionIV.B.Iin#a),andfour

managedaccountsDefendantstradedfor(theçiM anagedAccounts'')(collectively,withthe

CryptocurrencyPoolandtheFX Pool,thetdcustomerAccounts''l;and(2)certaintrading

accountsownedbyentitiescontrolledbyand/orbenefitingKambolinorm embersofhisfam ily

(theûsproprietaryAccounts'').Asaresult,Defendantsgeneratedtradingprofitsforthe

ProprietaryAccotmtsattheexpenseoftheCustom erAccounts. Defendantsgeneratedatleast

$1,451,559intotaltradingprofitsfortheProprietaryAccountswhilecausingtheCustomer

Aecountstoincuratleast$1,551,670innetlosses.

Dm ingtheRelevantPeriod,Defendantsexecutedtradesonbehalfofboth the

CustomerAccountsandtheProprietaryAccountsusingbunchedordersthattheyplacedand

executedinsuspenseaccountsatvariousfuturescommissionmerchants(:;FCM s'').Attheend

ofeaehtradingday,DefendantsinstrudedtheFCM toallocatethetradesDefendantsexecutedin

thesuspenseaccountstotheCustomerAccotmtsortheProprietary Aecounts.

Itisacom monpracticeforCPOsandCTASthatm anagem ultipleaccotmtsto

executetradesthrough btmchedordersandthen allocatethesetradesnm ongmultipleaccounts.

CFTC Regulations,however,requirethatCPOsandCTASengaginginthispracticeallocate

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 2 of 37
tradesonafairandequitablebasis,withnoaccountorgroupofaccountsreceivingconsistently

favorableorunfavorabletreatment.

Instead,Defendantsallocatedtradesinam annerdesignedtodisproportionally

benetk theProprietaryAccounts.Defendantstypicallyopenedandclosedtheirfuturespositions

inthesuspenseaccountsbytheend ofeachtradingday,beforetheyinstrudedtheFCM Sonhow

toallocatethetrades.Thus,bytheendofeachtradingday,Defendantscoulddeterminewhich

tradeswereprotkableandwhichwerenot.DefendantsdirectedtheFCM Sholdingthesuspense

accotmtstoallocatethemostprofitabletradestoProprietaryAccountsandtoallocatethe

unprofitableorlessprofitabletradestotheCustom erAccotmts.

By allocatingtradesinthism anner,Defendantsdisproportionatelyfavoredthe

ProprietaryAccounts,deprivedtheCustom erAccountsofaproportionalshareofthetrading

profitsDefendantsgenerated,andcausedtheCustomerAccotmtstoincuradisproportionate

shareofDefendants'tradinglosses.Consequently,Defendantsdefraudedparticipantsinthe

CryptocurrencyPoolandtheFX PoolandtheM anagedAccountcustom ers.

DefendantsfurtherdefraudedparticipantsintheCryptocurrencyPoolandtheFX

PoolandM anagedAccountCustomersbymisrepresentingtothem ,inPrivatePlacement

Memoranda(çTPM s'')andTradingAdvisoryAgreements(respectively),thatDefendantswould

allocateinvestm entopportunitiesfairlyandequitablynm ongDefendants'variouscomm odity

pools,m anagedaccounts,andtheProprietm'yAccounts.InthesePPM S, aswellasother

marketingm aterialsand solicitations,Defendantsalsom isrepresentedtoparticipantsinthe

CryptocurrencyPoolandtheFX PooltheinvestmentstrategiesDefendantswouldpursueon

behalfofeachpool,creatingthefalseimpressionthateachpoolwouldemployatradingstrategy

thatfocusedoncryptocurrencyfutlzrescontractsandforeignexchangefm urescontracts,

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 3 of 37
respectively,whenin factapproximately45% ofDefendants'tradingforeachpoolinvolved

variousequityindex futurescontracts,whichDefendantsallocatedunfairly.

8. Throughthisconductandtheconductdescribedfurtherherein,Defendantshave

engaged,areengaging,orareabouttheengagein adsandpracticesthatviolateSedions

4b(a)(1)(A)-(C)and4o(1)(A)-(B)oftheCommodityExchangeActCtAd''),7U.S.C.

jj6b(a)(1)(A)-(C),6/(1)(A)-(B),andCommissionRegulation(çlRegulation'')1.35(b)(5)(iv)(B),

17C.F.R.j1.35(b)(5)(iv)(B)(2022).

UnlessrestxainedandenjoinedbythisCourt,Defendantsarelikelytocontinue

engagingintheactsandpracticesallegedinthisComplaint.

10. Accordingly,pursuanttoSection6coftheAct,7U.S.C.j13a-1,theCommission

bringsthisactiontopermmzentlyenjoinDefendants'unlawfulactsandpracticesandtocompel

theircompliancewiththeActandRegulations,andtofurtherenjoinDefendantsfrom engaging

in anycomm odity-relatedactivity.In addition,theCom mission seekscivilm onetarypenalties

andremedialancillaryrelief,induding,butnotlimitedto,tradingandregistrationbans,

restitution,disgorgement,rescission,pre-andpost-judgmentinterest,andsuchotherreliefasthis

Courtdeem snecessaryandappropriate.

II. JURISDICTION AND VENUE

ThisCourthasjtlrisdidionoverthisactionunder28U.S.C.j1331(codifying

federalquestionjurisdiction)and28U.S.C.j1345(providingthatdistrictcourtshaveoriginal

jurisdictionovercivilactionscommencedbytheUnitedStatesorbyanyagencyexpressly

authorizedtosuebyAd ofCongress).Inaddition,Section6c(a)oftheAct,7U.S.C.j13a-1,

providesthatdistridcourtshavejurisdidiontohearadionsbroughtbytheCommissionfor

injundiveandotherreliefortoenforcecomplimwewiththeActwheneveritshallappeartothe

Com missionthatanypersonhasengaged,isengaging,orisabouttoengageinanyactor

4

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 4 of 37
practiceconstitutingaviolationofanyprovisionoftheActoranyrule,regulations,ororder

thereunder.

VenueproperlylieswiththisCourtpursuantto7U.S.C.j13a-1(e),because

DefendantshavetransactedbusinessinthisDistrict,andcertainoftheactsandpracticesin

violationoftheAd haveocctlrredwithinthisDistrid,nm ongotherplaces.Venueisalsom oper

under28U.S.C.j1391(c)(3)becauseDefendantKnmbolinresidesinthisDistrictandDefendant

SAM 'SprincipleplaceofbusinessiswithinthisDistrict.

111. PARTIES

13. PlaintiffCom modityFuturesTradingCom mission isanindependentfederal

regulatoryagencychargedbyCongresswiththeadm inistrationandenforcem entoftheActand

Regulationspromulgatedthereunder.TheComm ission isheadquarteredat115521stStreet,

NW ,W ashington,DC 20581.

DefendantSystematicAlphaM anagem ent,LLC isaNew York lim itedliability

company,withitsprincipleplaceofbusinessat18201CollinsAve.,708,SunnylslesBeach,

Florida33160.SAM isregisteredwiththeComm issionasaCPO and asaCTA.

15. DefendantPeterKam bolin isanindividualwhoresidesinStmnyIslesBeach,

Florida.Kam bolinco-founded SAM andduringtheRelevantPeriodwastheowner,m anaging

m ember,andChiefExecutiveOfticerofSAM .KambolinisregisteredwiththeComm issionas

anAssociatedPersonofSAM .

16. ReliefDefendantJerseyCityPartners,LLC (ûtlerseyCity'')isaNew Yorklimited

liabilitycom pany,with itsprincipleplaceofbusinessat18201CollinsAve.,Suite708,Sunny

lslesBeach,FL 33160.KnmbolinisthesoleownerofJerseyCityandmakesa1ldecisionson

behalfofthecompany.DuringtheRelevantPeriod,JerseyCity received improperallocationsof

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 5 of 37
profitabletradesintoitstradingaccounts,transfeningtheprofitsfrom thesetradesintoitsbnnk

accountsorotherwiseusingthefunds.

ReliefDefendantThorEnterprisesIntemational,lnc.(û1Thor'')isaNevis,W est

Indiescorporation,with itsprincipleplaceofbusinessatHtmkinsPlaza,M ain St.556,

Charlestown,St.Kitts& N evis.DuringtheRelevantPeriod,Knmbolin'sbrotherexercised

controloverThorandasofSeptember2019wasgivenfullpowerofattorneytom anageThorby

Thor'snom inalowner.DuringtheRelevantPeriod,Thorreceivedim properallocationsof

proftabletradesintoitstradingaccotmts,transfeningtheproftsfrom thesetradesintoitsbank

accountsorotherwiseusingthefunds.

IV. FACTS

A. IndustryBackground

18. A futurescontractisanagreem enttobuyorsellacomm odityatafixedquantity

andpricefordeliveryorcash settlementataspecificdateandtimeinthefuttlre.Futtlres

contractsareusedtoassum eorshiftpricerisk andmaybesatisfiedbycashsettlem ent,delivery,

oroffset.Futurescontractsarecomm onlyusedtohedgerisksortospeculateonthepriceof

physicalcommodities.Futlzrescontractsaretraded onexchanges--designatedcontractmarkets

regulatedbytheCFTC.Allofthefuturescontractsatissuehereweretradedonexchanges

operatedbyCM E Group,Inc.CûCM E'').

A futurescomm issionm erchant,orFCM ,isan individual,association,

partnership,corporation,ortrustthat,nm ongotherthings,isengaged insolicitingorinaccepting

ordersforregulatedtransactionsincludingfutures,swaps,com modityoptions,orretail

com moditytransactions;and, which,inconnectionwiththeseactivities,ûtacceptsanym oney,

sectlrities,orproperty(orextendscreditinlieuthereogtomargin,guarantee,orsecureany

6

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 6 of 37
tradesorcontractsthatresultormayresulttherefrom.''Section1a(28)(A)oftheAct,7U.S.C.

j1a(28)(A).

A tcomm oditypool''isûçal'linvestmenttrust,syndicate,orsim ilarform of

enterpriseoperatedforthepurposeoftradingcom modityinterests,''includingfuturescontracts.

Sedion1a(10)(A)oftheAd,7U.S.C.j1a(10)(A).

A çûcomm oditypooloperator''orCPO isanypersonûtengagedinabusinessthatis

ofthenatureofacommoditypool''andGtwho,inconnectiontherewith,solicits,accepts,or

receivesfrom others,fundssecurities,orproperty''forthepurposeoftradingcom modity

interests,includingfuturescontracts.Section1a(11)(A)oftheAd,7U.S.C.j1a(11)(A).

A tdcom m oditytradingadvisor''orCTA isanypersonwholçforcompensation or

profit,engagesinthebusinessofadvisingothers...astotheadvisabilityoftrading''infutures

contracts.Section1a(12)(A)oftheAct7U.S.C.j1a(12)(A).Commoditytradingadvisorsthat

directtradinginclientaccountstypicallyarerequiredtoregisterwiththeCFTC.A trading

accountforwhichtheaccotmtownergrantsaCTA authoritytodirectthetradinginthataccount

iscom monlyknown asaStm anaged account.''

23. A tûsuspense''orexecution-only account,isatem poraryfuttlrestradingaccount

held by anFCM inwhichtradesmaybeexecutedbutaresubsequentlyallocatedtoadifferent

accountforclearing.Theclearingaccountts)receivingtheseexecutedtradesmaybeheldatthe

sameFCM asthesuspenseaccountormaybeheldatdifferentFCM .Ifthesuspenseaccount

andclearingaccotmtareheldbydifferentFCM S,thetradesfrom thesuspenseaccountare

tgiven-up''bytheexecutingFCM totheclearingFCM .

A lkbunchedorder''isasingleorderplacedbyaCPO orCTA onbehalfof

multiplecommoditypoolsand/ormanagedaccounts.TheCPO orCTA subsequentlyallocates

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 7 of 37
theexecutedtradesresultingfrom abunchedordernm ongthepm icipatingpooland/ormanaged

accounts.

25. CPOsandCTASareconsideredtmdertheRegulationstobeûkeligibleaccount

managers''whomayallocatetradesexecutedthrough abtmchedorderam ongcustomeraccounts.

Regulation1.35(b)(5)(i),17C.F.R.j1.35(b)(5)(i)(2022).Eligibleaccountmanagersmust

follow certainregulationsandacoresetofprincipleswhenallocatingtradesonapost-tradebasis

foritscustomers.Principaly,per1.35(b)(5)(iv)(B),17C.F.R.1.35(b)(5)(iv)(B)(2022),

allocationsmustbefairandequitable,andnoaccountoragroupofaccountsm ayreceive

consistentlyfavorableorunfavorabletreatment.

B. DefendantsSolicited lndividualsandlnstitutionalAssetM anagersto

ParticipateEitherin Com m odity PoolsorM anagedAccounts.

Defendantshaveheldthem selvesoutasinvestmentmanagerstoindividualand

institutionaldientsformorethan adecade.Kambolinco-founded SAM in2007andlater

becam eitssoleowner.Throughoutthattim e,Defendantssolicitedpoolparticipantsand

m anaged accountcustom ers,includingbothindividualsandinstitutionalassetmanagers.

Defendantssolieitedthesepoolparticipantsandm anagedaccountcustomerstoparticipateina

vmietyofwhattheym arketedasfully-autom ated,algorithm -basedtradingstrategies.In

m arketingmaterialsandm onthlyletterstopoolparticipantsandm anagedaccountcustom ers

dudngtheRelevantPeriod,SAM repeatedlyhelditselfouttobeafully system atic,quantittive

short-term CTA,withtheobjectiveofgeneratingCûpositiveabsoluteret= s,havinglowto

negativecorrelationtoanytraditionalandaltemativeinvestments,indudingmajorCTA indices,

whileprovidingenhancedliquidity andtransprencytoitsinvestors.''

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 8 of 37
27. PoolparticipantsparticipatedinDefendants'tradingstrategiesbycontributing

fundstooneormorecom moditypoolsoperatedbySAM .Defendantspurportedtotradeeach

comm oditypoolin accordancewithaparticulartradingstrategy.

28. Defendantsofferedtom anagedaccountcustomersthesam etradingstrategies

theypurportedlyusedforthecomm oditypools.M anagedaecountcustom ersgrantedSAM the

authoritytotradedirectly inthecustomer'sownaccount, which Defendantspurportedtotradein

accordancewithaparticulartradingstrategy.

29. Defendantstypically solicitedprospectivepoolparticipantsandprospective

m anagedaccountcustom ersdirectly.

30. Defendantsin som einstancesworkeddirectlywithemployeesattheFCM Swith

whichtheyhadrelationshipstosetupthetradingaccountstheywoulduseforeithertheir

comm oditypoolsortheirmanagedaccountcustomers.Inotherinstances, Defendantsworked

withanIntroducingBroker(çû1B'')tosetuptradingaccountsforeitherthecommoditypoolsor

fortheirm anagedaccountcustom ers.

1. TheCom m odityPools

DtuingtheRelevantPeriod,SAM ,andKambolinasanAPofSAM ,operatedat

leasttwocomm oditypoolsasaCPO,theSystematicAlphaCryptocurrencyM asterFund, Ltd.

(thetcryptocurrencyPoo1'')andtheSystematieAlphaFX M asterFund,Ltd.(theCTX Pool'').

a. TheCryptocurrencyPool

32. TheCryptocurrencyPoolwasaCaymanlslandsexemptedcompanyestablished

inorarotmdJanuary2018.TheCryptocurrencyPoolwasfundedthrough am aster-feeder

stnlcture.Poolpm icipantscontributedfundseithertotheSystematicAlphaCryptocurrency

Fund,LP(aDelawareLimitedPartnership)ortheSystematicAlphaCryptocurrencyOffshore

Ftmd,Ltd(aCaymanIslandexemptedcompany).BoththeSystematicAlphaCryptocurrency

9

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 9 of 37
Fund,LP andtheSystem aticAlphaCryptocurrency OffshoreFund,Ltd ûtfed''poolparticipant

fundstotheCryptocurrency Pool,whichownedthetradingaccountsusedtotradefm ures

contracts.

DefendantsopenedanaccountfortheCryptocurrencyPoolatFCM 1in oraround

January2018.DefendantsbegantradinginthisaccotmtinFebruary2018.Defendantsceased

trading inthisaccountinoraroundM arch2020.

34. DefendantsopenedandbegantradinginasecondaccountfortheCryptocurrency

PoolinoraroundFebnzary2018atadifferentFCM (ûTCM 259).Defendantsbegantradingin

thisaccountatFCM 2inoraroundApril2018.Defendantsopenedandbegantradinginathird

accountfortheCryptocurrencyPoolatanotherFCM CiFCM 3'3inorarotmdApril2018.

Defendantsopened andbegantradinginan additionalaccountatFCM 3inoraroundM arch

2020.

35. Defendantsbegan receivingcontributionsfrom poolparticipantstothe

Cryptocurrency PoolbeginninginJanuary2018.BetweenJanuary 2018andOctober2020,

whenDefendantsceasedtradingforandoperatingtheCryptocurrencyPool,Defendantsreceived

atleast$6,121,704from atleast29poolparticipantsintheCryptocurrencyPool.

36. lnm arketingmaterialsfortheCryptocurrencyPoolpreparedanddisseminatedto

poolparticipantsandprospectivepoolparticipantsin2018,Defendantsstatedthattheyintended

usepoolassetstotradecryptocurrencyfuturescontracts.lnthesemarketingm aterials,

DefendantsdescribedtheCryptocurencyPool'stradingstrategyasseekingtoûttakeadvantage

ofthepricepredictabilityofcryptocurrencyfutures,relatedtotheunusuallyhighconcentration

oftradinginretailhands''andçûtoachieveitsinvestmentobjectiveofdeliveringpositivereturns

whilesignificantlydnm peningthevolatilityofunderlyingcryptocurrencym arkets...while

10

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 10 of 37
tradingexclusivelyregulated futuresmarketsontheCM E andCBOE exchanges,thus

eliminatingtheriskofpotentialprincipallossrelatedtohacking,ortoinfrastructuralproblem s

oftenassociatedwiththetmregulatedprivateexchanges.''

DefendantsgavepoolparticipantsaPPM thatstatedthattheCryptocurrency Pool

wouldlûseektoachieveitsinvestmentobjectivebysystematicalytradingexchangetraded

futlrescontractsonmajorliquidûcryptocurrencies.'''

38. InApril2019,Defendantssupplem entedtheCryptocurrency Pool'sPPM tostate

thattheCryptocurrencyPoolwouldtradefinancialfuturescontractsotherthancryptocurrency

futurescontracts.Specifically,thisApril2019supplementprovidedthattheCryptocurrency

Poolwouldçtseektoachieveitsinvestmentobjectivebysystematicallytradingexchangetraded

futurescontractsonmajorliquidtûcryptocurrencies''aswelasanyotherfinancialfuttlres

contractstoprovidefurtherdiversitication.''

b. TheFX Pool

39. TheFX PoolwasaCaym anIslandsexem ptedcompanyestablishedinoraround

April2019.LiketheCryptocurencyPool,Defendantssetupam aster-feederstructuretoftmd

theFX Pool.PoolparticipantscontributedfundseithertotheSystematicAlphaFX FundLP(a

DelawareLimitedPartnership)ortheSystematicAlphaFX OffshoreFundLtd(aCayman

Islandsexemptedcompany).lnturn,bothoftheseentitiessentfundstotheFX Poolfortrading.

40. InoraroundFebruary 2020,DefendantsopenedatradingaccountfortheFX Pool

atFCM 2.DefendantsbegantradingonbehalfoftheFX PoolinthisaccountinM arch2020.In

oraroundDecember2020,DefendantsopenedatradingaccountfortheFX PoolatFCM 3.ln

July2020,DefendantsopenedadditionaltradingaccotmtsfortheFX PoolatFCM 2.Atvarious

pointsduringtheRelevantPedod,DefendantstradedfortheFX Poolineachoftheseaccounts.

11

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 11 of 37
41. Defendantsbeganreceivingcontributionsfrom poolparticipantstotheFX Pool

beginningOctober2019.BetweenOctober2019andNovem ber2021,whenDefendantsceased

tradingforandoperatingtheFX Pool,Defendantsreceivedatleast$680,000from atleast9pool

participantsintheFX Pool.

42. Inm arketingm aterialsfortheFX Pool,Defendantsstatedthattheyintendedto

usefundscontributedtotheFX PooltotradeforeignexehangeCTX'')futurescontrads.Inthese

marketingmaterials,DefendantsdescribedtheFX Pool'stradingstrategyasseekingtotûgenerate

highrisk-adjustedreturnswhichareuncorrelatedtomajorFX indexesandotherFX

managers...tradginglmajorFX fmuresonCMEusingproprietyryfullysystematic,mostly

contrarian,modelswithanaverageholdingperiodof2- 3days.''

43. DefendantsprovidedpoolparticipantsintheFX Poolwith aPPM .ThePPM for

theFX Poolprovidedin relevantpart,thattheFX Poolûswillseektoachieveitsinvestment

objectivebysystematicallytradingforeigncurrency''andtlbyemployingadiversitiedsetof

trend-following,m omentum ,andcontrariantradingstrategies,usingfullyautomatedsystem atic

executionwithbuilt-inrigorousriskmanagement.''

2. TheM anagedAccounts

BetweenJuly9,2020andDecember13,2021,Defendantsexercised

discretionarytradingauthorityoverthefotlrM anagedAccounts.

custom ersincludedboth individualandinstitutionaltraders.

Theses4anagedAccount

45. DefendantsdirectedtheseM anagedAccountcustom erstoopentradingaccounts

atFCM 1,anotherU.s.-basedFCM (CTCM 4'9),andaforeignFCM CûFCM 59').Defendants

purportedtotradeeachoftheseaccountsusingthesnmefully-autom ated,algorithm -based

tradingstrategiesusedfortheCryptocurrencyPool,theFX Pool,orothercomm oditypools

Defendantsoffered.

12

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 12 of 37
46. DefendantsexecutedTradingAdvisoryAgreementswiththeM anagedAccotmt

custom ers.TheseTradingAdvisoryAgreementsdescribedtheparticulartradingstrategy

DefendantsintendedtouseforaspecificM anagedAccount.

C. DefendantsTradedfortheProprietaryAccountsthatW ereControlled by

K ambolin orM embersofKam bolin'sFam ily.

47. DuringtheRelevantPeriod,Knm bolinalsoexerciseddiscretionarytrading

authorityovertradingaccountsownedbyJerseyCityand Thor.

48. Kam bolin wasthesoleownerofandcontrolledJerseyCity.Asaresult,

Knm bolinbenetm eddirectlyfrom tradingprofitsgeneratedbytradingforJerseyCity's

accounts.

49. DtlringtheRelevantPeriod,ThorwascontrolledbyKnm bolin'sbrother.Before

theRelevantPeriod,Kam bolin'sbrotherhadownedThorbutlatertransferredownership ofThor

toanotherperson.Afterthistransferofownership,however,Kambolin'sbrotherstillexercised

controloverThor.Forexnmple,duringtheRelevantPeriod,Kambolin'sbrotherrequested

multipletransfersoffundsfrom Thor'stradingaeeountsatvariousFCM StoThor'sbank

account.In September2019,thenom inalownerofThorgrantedKambolin'sbrotherfullpower

ofattorneyoverThor.

Defendantsbenetm edfrom theirtradingforThor'saccountsbecauseThorpaid

SAM incentivefeesthatwerebasedonthetradingprotitsDefendantsgeneratedinthoseThor

accotm ts.

AtvarioustimesduringtheRelevantPeriod,Thormaintainedtradingaccotmtsat

FCM S1and3.Atvarioustim esduringtheRelevantPeriod,JerseyCitym aintainedtrading

accountsatFCM 3andanotherU.s.-basedFCM CTCM 6'').

13

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 13 of 37
D. DefendantsFraudulentlyAllocated TradesBetweentheCustom erAccounts

and theProprietary AccountstoG enerateTradingProfitsin theProprietary

Accounts.

1. DefendantsUsedBunched Ordersand Post-rradeAllocationto

TradefortheCustom erAccountsand theProprietaryAccountsand

RepresentedThatTheyW ould AllocateTradesFairly andEquitably

Between Both SetsofAccounts.

52. DuringtheRelevantPeriod,DefendantstradedcollectivelyfortheCustomer

AccountsandtheProprietaryAccotmtsusingbtmchedorders.Defendantssubsequently

allocatedthetradesexecutedthroughthesebtmchedordersam ongtheCustom erAccountsand

theProprietaryAccounts.

53. Between February2018,whenDefendantsbegantradingfortheCryptocurrency

Pool,andDecember2018,Defendantsexecutedtradesdirectlyinvarioustrading accounts

belongingtotheCryptocurrencyPool.DuringtheRelevantPeriod,specificallybegilmingin

January2019throughOctober2020,whenDefendantsceasedtradingforandoperatingthe

CryptocurrencyPool,Defendantseontinuedtoexecutesom etradesdiredlyintotheseaecounts

whilealso executingasubstantialnumberoftradesfortheCryptocurrencyPoolthroughbtmched

orders,asdescribedbelow.

BetweenM m'ch2020,whenDefendantsbegantradingfortheFX Pool,and

January2021,Defendantsexecutedtradesdirectly invarioustradingaccountsbelongingtothe

FX Pool.BeginninginJanuary2021throughNovem ber2021,whenDefendantsceasedtrading

forandoperatingtheFX Pool,DefendantsexecutedtradesfortheFX Poolexclusivelythrough

bunchedorders,asdescribedbelow .

55. BetweenJuly9,2020andDecember13,2021,Defendantsexecutedsom etrades

fortheM anagedAccountsdiredlyintoeaehindividualM anagedAecount.However,beginning

14

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 14 of 37
inJanuary2021throughNovember2021,Defendantsexecutedthemajorityoftheirtradesfor

theM anagedAccountsthroughbunchedorders,asdescribedbelow.

56. FortheCryptocurrencyPool,Defendantsexecutedbunchedordersinasuspense

accountataU.s.-basedFCM (ûSFCM 773.DefendantsthensentinstrudionstoFCM 7toçûgive

up''theexecutedtradesandallocatethem betweentheCryptocurrencyPoolaccountandthe

ThoraccountheldatFCM 1.Specifically,Kam bolin,orothersemployedbySAM actingat

Knmbolin'sdirection,uploadedadatatileontoFCM 7'sallocationportalthatinstructedFCM 7

astowhichtradesinwhichfuturescontractsshouldbeallocatedtotheCryptocurrencyPool

accountandtotheThoraccount.lnaccordancewiththeseinstructions, FCM 7gaveup and

allocatedtradesbetweentheCryptocurencyPoolaccountandtheThoraccountheldatFCM 1

betw eenJanuary 2019andJanuary2020.

FortheCryptocurrencyPool,theFX Pool,andtheM anagedAccounts,

DefendantsexecutedbtmchedordersinasuspenseaccountatFCM 3.Defendantssent

instructionstoFCM 3toallocatetheexecutedtradesinthisaccountam ongtheCryptocurrency

Pool,FX Pool,Thor,andJerseyCity accountsheldatFCM 3,aswellasgiveupandallocate

tradestotheM anagedAccountsthatwereheldatFCM 1,FCM 4, andFCM 5.Specitically,at

theendofeaehtradingday,Kambolinsentanem ailtoFCM 3thatattachedadataGlethatset

forthexactlywhichtradesinwhichfuturescontractsexecutedthatdayshouldbeallocatedto

eachoftheProprietaryAccountsorCustom erAccounts.Inaccordancewiththeseinstructions,

FCM 3gaveupancl/orallocatedtradesam ongtheseaccotmtsbetweenM arch2020and

Novem ber2021.

58. ForboththesuspenseaeeotmtatFCM 7andthesuspenseaccountatFCM 3

Defendantshaduntiltheendofthetradingday,aftertheyhadexecuteda11ofthatday'stradesin

15

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 15 of 37
thesuspenseaccount,to instructeitherFCM 7orFCM 3toallocateparticulartradestoparticular

Custom erAccountsorProprietm'yAccountsatthesnmeorotherFCM SatwhichDefendants

m aintainedtheseaccounts.

59. DefendantsinstructedFCM 7andFCM 3to setupthesuspenseaccotmtsheldby

eachFCM toallocatetradeson anaveragepricebasis.Thism eantthatFCM 7andFCM 3,

whenallocatingtradestotheCustom erAccountsandProprietaryAccounts,firstcalculatedthe

averagepriceofallofthetradesexeeutedaspartofabunehedorderforaparticulr f'utures

contrad.FCM 7andFCM 3thenallocatedtradesto individualCustom erAecountsor

ProprietaryAccountsatthisaverageprice.

60. Bysettingup andinstnlctingFCM 7andFCM 3toallocateonaverageprice

basis,Defendantscreatedtheappearancethatthetradestheywereexecutingthroughbtmched

ordersw erebeingallocatedonafairandequitablebasis,asrequiredbytheRegulations.

61. Kam bolinrepresentedtotheIB thatassistedDefendantsinsettingupsom eofthe

CustomerAccountsandProprietaryAccountsatFCM 3thatDefendantswouldbeallocating

tradeson anaveragepricebasis.

62. lnthePPM SdistributedtoparticipantsintheCryptocurrencyPoolandtheFX

Pool,DefendantsrepresentedthatSAM wouldbeaggregatingordersplacedon behalfofthe

poolwithordersplacedforotherpools,m anagedaccotmts,andtheProprietaryAccounts.

However,DefendantsrepresentedthatSAM ûwillactinamnnnerthatitconsidersfairand

equitableinallocatinginvestmentopportunities''am ongthevariouspools,managedaccounts,

andProprietaryAccountsDefendantsweretradingfor.

63. Defendantsmadesim ilarrepresentationstoatleastsomeoftheM anagedAccount

custom ersintheTradingAdvisoryAgreementstheyexecutedwiththoseM anagedAccount

16

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 16 of 37
custom ers.Forexample,in oneoftheTradingAdvisoryAgreem ents,Defendantsagreedthat

SAM wouldatal1tim esallocatetradesbetweentheM anagedAccountcustom erandSAM 'S

otherdientsçûinafairandequitablem nnnersothatnoaccotmtorgroup ofaccountsconsistently

receivesfavorableorunfavorabletreatm entovertime.''

2. DefendantsDefrauded PoolParticipantsandM anagedAccount

Custom ersby Inequitably AllocatingTradesBetween theCustom er

AccountsandtheProprietary AccountsinordertoGenerateTrading

ProfitsintheProprietaryAccounts.

a. DefendantsUnfairlyandInequitablyAllocatedtheTrades

Executed in theSuspenseAccountsatFCM 7andFCM 3

betweentheProprietaryAccountsand theCustomerAccounts.

64. AlthoughDefendantsinstrbldedFCM 7andFCM 3toallocatetradesbetweenthe

Custom erAccotmtsandtheProprietaryAccountsonanaveragepricebasis,Defendants

allocatedtradesinawaythatconsistentlygeneratedtradingprofitsfortheProprietaryAccounts

anddisadvantagedtheCustomerAccounts.

65. DuringtheRelevantPeriod,whentradingusingbunchedordersinthesuspense

accountsatFCM 7andFCM 3,Defendantstypicallyopenedapositioninaparticularfutures

contractandclosed,oroffset,thatsamepositiononthesmueday.Byopeningand closinga

futtlrescontractpositiononthesnmeday,Defendantsrealizedagainorlossontheirtradesfor

thatfuturescontractbeforetheendofthetradingday.

66. BecauseDefendantsinstnlctedFCM 7andFCM 3toallocatetradesonan

averagepricebasis,al1ofDefendants'tradesforaparticularfuturescontractin asinglebunched

orderreceivedthesnmeprice.However,Defendantsrealizedprofitsontheirtradesforsom eof

thefuturescontractsthey tradedwhilerealizinglossesonothers.

67. Defendantsthereforeknew attheendofeachtradingday,andbeforeinstructing

FCM 7orFCM 3toallocateparticularfuturescontractsandtradestoeithertheProprietary

17

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 17 of 37
AccountsortheCustomerAccounts,whichfutttrescontradsinthesuspenseaccotmtsateither

FCM 7orFCM 3resultedin profitabletradesandwhichdidnot.DuringtheRelevantPeriod,

DefendantsconsistentlyinstructedFCM 7orFCM 3toallocatethetradesinthosefuttlres

contradsthatwereprotitabletotheProprietm'yAccounts.DefendantsinstructedFCM 7or

FCM 3toallocatethetradesinthosefuturescontractsthatwereunprofitableorlessprofitable

futurescontracttradestotheCustom erAccounts.

b. By Unfairly andEquitably AllocatingTrades,Defendants

G eneratedSubstantialProfitsfortheProprietary Accounts

and Defrauded PoolParticipantsandM anagedAccount

Custom ers.

68. Bytradingandallocatingtradesinthism anner,Defendantsachievedconsistently

highprotitsdtlringtheRelevantPeriod,month overmonth,intheProprietaryAccounts.For

exnmple,theProprietaryAccountswereprofitablein31ofthe34m onthsduringtheRelevant

Periodwhen DefendantsallocatedtradestotheProprietaryAccotmts,orover91.% ofthetim e.

DtlringtheRelevantPeriod,Defendants'tradinggeneratedtotalprofitsof$1,451,559forthe

ProprietaryAccounts.

69. Inaddition,bytradingandallocatingtradesinthism anner,Defendantswereable

toachieveextraordinarilyhighratesofreturnfortheProprietaryAccounts.Forexample,

KnmbolinfundedtheJerseyCityaccountatFCM 3withonly$10,000inMarch2020.During

M arch2020,asaresultofreceivingallocationsofprotkabletrades,thebalanceintheJersey

Cityaccountgrew to$255,714.67,arateofreturnof2,457.1% .Knmbolinwithdrew $135,000

from JerseyCity'saccountatFCM 3toJerseyCity'sbarlk accotmt,andbytheendofM arch

2020,JerseyCityhadanendingbalanceof$124,522.17.

Sim ilarly,atthebeginningofDecem ber2019,theThoraccountatFCM 1hada

beginningbalanceofonly$444.50andreceivednoadditionalincomingcash.Dm ingDecember

18

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 18 of 37
2019,asaresultofreceivingallocationsofprotitabletrades,thebalanceintheThoraccount

grew to$60,847.39,arateofreturnof13,559.8% .$60,051.48waswithdrawnfrom theThor

accotmtatFCM 1bytheend ofDecember2019toThor'sbalzkaccotmtatanon-U .S.fnancial

institution.

71. Defendantswereabletoachievetheseratesofreturn andnetprofitsforthe

ProprietaryAccotmtsinpartbecausetheyaggregatedtheirtradingfortheProprietaryAccotmts

withtheirtradingfortheCustom erAccotmtsthroughbunchedorders.Bydoingso,Defendants

wereabletoplacem oretradesformorefuturescontractsusingbunchedordersthantheywould

havebeen abletodohadtheybeentradingwithonlythemoneytheyorotherscontributedtothe

ProprietaryAccounts.Thisisbecausethecombinedmoneyin theProprietaryAccountsandthe

Custom erAccountsallowedtoDefendantstopostthem arginneededtoplacetradesforlarger

quantitiesofparticularfuturescontractsand/oralargernumberofdifferentfuturescontractsthan

DefendantsotherwisecouldhavedonesohadtheybeentradingthemoneyintheProprietary

Accountsalone.

72. 'lncontrast,bytradingand alloeatingtradesinthismanner,Defendantsdeprived

Custom erAccountsofaproportionalshareofthetradingprofitsDefendantsgeneratedand

causedtheCustom erAccotmtstoincuradisproportionateshareofDefendants'tradinglosses.

DuringtheRelevantPeriod,theCustom erAccountsconsistentlysustainedlosses,oratbest,a

low levelofprotkability.

73. Specifically,betweenJanuary2019through October2020,whenDefendants

allocatedtradestotheCryptocurrencyPoolfrom thesuspenseaccountsatFCM 7andFCM 3,

theCryptocurrencyPoolaccountthatreceivedallocationsfrom thebunchedordersDefendants

19

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 19 of 37
executedatFCM 7orFCM 3wasprofitableinonly 1of22months,orlessthan 5% ofthetim e;

andsufferednetrealizedtradinglossesofatleast$1,283,325.

Between January2021throughNovem ber2021,whenDefendantsallocated

tradestotheFX Poolfrom thesuspenseaccountatFCM 3,theFX Poolaccountthatreceived

allocationsfrom thebunehedordersDefendantsexecuted atFCM 3wasprofitableinonly3of

the 10m onthswhen Defendantsallocatedtradestothataccount, orapproxim ately30% ofthe

time;andsufferednetrealizedtradinglossesofatleast$13,910.

75. BetweenJanuary2021andN ovember2021,whenDefendantsallocatedtradesto

theM anagedAecountsfrom thesuspenseaccountatFCM 3,theM anagedAccountswere

colledivelyprotitableonlyin4 of11m onths,orapproxim ately36% ofthetim e;and suffered

netrealizedtradinglossesofatleast$254,434.

76. ThisdisparitybetweentheprotitsgeneratedfortheProprietaryAccountsversus

thepro/tsgeneratedfortheCustomerAccountsisinconsistentwithafairandequitable

allocation oftradesexecutedviabunchedordersandpost-tradeallocation. Byknowinglyor

reeklesslyallocatingthetradestheyexecutedinthesuspenseaccountsatFCM 7andFCM 3in a

m amwrthatconsistentlygeneratedtradingprofitsfortheProprietary Aeeountsand

disadvantagedtheCustomerAccounts,DefendantsdefraudedparticipantsintheCryptocurrency

PoolandFX PoolaswellastheM anagedAccountcustomers.

77. Thisisfurtherillustratedbythefactthat,eventhoughDefendantsfraudulently

allocatedtradestotheCryptocurrencyPool,theFX Pool,andtheM anagedAccountsforonlya

portionofthetim eforwhich Defendantstradedontheirbehalf,Defendants'fraudulent

allocationsreducedtheoverallprofhability oftheCryptocurrencyPool,theFX Pool, andthe

M anagedAccountsovertheirentireexistence.TheCryptocurrency Poolasawholewas

20

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 20 of 37
profitableonlyin 12of34monthsDefendantsoperatedit,orapproxim ately35% ofthetime.

TheFX Poolasawholewasprofitableonly in 12of26m onthsDefendantsoperatedit,or

approximately38% ofthetime.TheM anagedAccountswerecollectivelyprotkableonlyin7of

18m onths,orapproxim ately39% ofthetim e.

78. Byknowinglyorrecklesslyallocatingthetradestheyexecutedinthesuspense

accountsatFCM 7andFCM 3inam nnnerthatconsistently generatedtradingprotitsforthe

ProprietaryAccountsanddisadvantagedtheCustomerAccounts,Defendantsalsocontradicted

theexpressrepresentationstheym adetoparticipantsintheCryptocurrencyPoolandtheFX Pool

inthePPM S;specifically,therepresentation thatDefendantswouldû:actinam alm erthatit

considersfairandequitableinalloeatinginvestingopportunities''am ongthevmiouspools,

m anagedaccounts,andProprietaryAccountsDefendantsweretradingfor.Sim ilarly,by

allocatingtradesinthem nnnerdescribedabove,Defendantscontradictedtherepresentationthey

madetoatleastsomeM anagedAccountcustom ersintheTradingAdvisoryAgreementthat

Defendantswouldallocatetradesçlin afairandequitablemnnnersothatno accotmtorgroupof

accountsconsistentlyreceivesfavourableorunfavourable(sicltreatmentovertime.''

79. Defendantsfraudulently allocatedtradesinthemannerdescribedaboveonnearly

adailybasisthroughouttheRelevantPeriod.Defendantsengagedinthisconductwithrespectto

theCryptocurrencyPoolbeginninginJanuary2019andcontinuingthroughOctober2020,when

DefendantsceasedtradingforandoperatingtheCryptocurrencyPool.Defendantsengaged in

thisconductwithrespecttotheFX PoolbeginninginJanuary2021andcontinuingtllrough

November2021,when DefendantsceasedtradingforandoperatingtheFX Pool.Defendants

engagedinthiscondud withrespecttotheM anagedAccountsbegirminginJanuary2021and

continuingthroughNovember2021.

21

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 21 of 37
e. Kam bolinand OthersTransferred ProfitsG eneratedinthe

ProprietaryAccountstoBankAccountsThey Controlled.

80. DuringtheRelevantPeriod,Kambolintransferredatleast$600,000from Jersey

City'stradingaccountstoJerseyCity'sbnnkaccounts.Knmbolinthenroutinelytransferred

moneyfrom JerseyCity'sbankaccountstohispersonalbank accountsortootherbankaccotmts

controlled byhim.JerseyCityhadnootherlegitim ateclaim tothem oneyKambolintransferred

from JerseyCity'stradingaccountstoJersey City'sbankaccounts.

81. DlzringtheRelevantPeriod,atleast$850,000wastransferredfrom Thor's

tradingaccountstoThor'sbankaccountsatnon-U.S.financialinstitutions.Thorhadnoother

legitim ateclaim tothemoneytransferredfrom Thor'stradingaccountstoThor'sbankaccounts.

82. Inaddition,SAM receivedfrom Thoratotalof$338,783.66inmanagementand

incentivefeesbasedonDefendants'tradingfortheThorAccounts.

3. ExamplesofDefendants'FraudulentAllocations.

a. M ay20,2019

83. OnM ay20,2019,Defendants,placedmultiplebunchedordersinthesuspense

accountatFCM 7.Asaresult,executedround-triptradesinthreedifferentequityindex futures

contracts,theE-miniS&P M idcap400lndex,E-m iniRussell2000lndex,andE-miniS&P 500

lndex,alltradedonCM E.Defendantsalsoexecutedtradesthzoughthesebunchedordersthat

resultedinsmall(1or2lot)positionsintheE-miniS&PMidcap400lndex,E-miniRussell2000

Index,andE-miniNasdaq-looIndex(alsotradedonCM E)fmurescontractsthatremainedopen

attheendofthetradingday.

84. BytheendofthetradingdayonM ay20,2019,Defendantshadrealizedprofitsof

$7,157.14ontheirround-triptradesintheE-miniS&PM idcap400lndexcontrad andprofitsof

22

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 22 of 37
$1,150ontheirround-triptradesintheE-miniRussell2000Indexcontract.Defendantsrealized

lossesof$6,937.50ontheirround-triptradesintheE-miniS&P500Indexcontract.

85. Attheendoftheday,afterDefendantshadrealizedtheseprofitsandlosses,

Kambolinoranem ployeeofSAM actingatKambolin'sdirection,uploadedafiletoFCM 7's

custom erportalcontainingDefendants'instnzctionstoFCM 7onhow toallocatethetrades

betweentheThoraccountandtheCryptocurrencyPoolaccount.Ptlrsuanttotheseinstrudions,

FCM 7allocatedtheround-triptradesintheE-miniS&P M idcap400IndexcontractandtheEm iniRussell2000IndexcontracttotheThoraccount.Plzrsuanttotheseinstructions,FCM 7

allocatedtheround-triptradesintheE-miniS&P 500lndextotheCryptoeurrencyPoolaccount.

Asaresultofthisallocation,theThoraecotmtobtained$8,307.14inprofitsfrom theE-mini

S&P M idcap400lndexcontractandtheE-miniRussell2000 lndex contractround-triptrades.

TheCryptocurrencyPoolincurredthe$6,937.50lossfrom theE-miniS&P500Indexcontract

rotmd-triptrades.

86. Theprofitsandlossesresultingfrom Defendants'allocation ofround-triptrades

betweentheThoraccotmtandtheCryptocurrencyPoolaccountisshowninthefollowingtable:

(jkï''.''')'''l7jljr'î''j'f$'j'.''''!'')41q'j/ljrljyl '.'tjPjj$îv'''2'1s4jbàL)))k*m''QIY>1)j/$.à ''v4'jtj st.jhjljlyqjyg'tl'jljyjjsrjjjkjyj''féj(ltfU 7WT ''$''j''x'.gljqj$V);.yjyrpLlqljjLvjl%jjtjjptjAjj/jJ''.'.''1X ' jt'Q'*''ïv?j'''k'''''h? Dt:'l''' -M7-k'!lö(t--.îï,g-j

-

,j

-i'j1.!.7'

.. .k.....'.

.)..-5i;lbp1-@ag').'2:.'.p.I.lt.j*-I#'!'=-..v. .Ridëk!:1.l

1@ë.

-i.@.,.1l.

'

.jl.

'',Il'.-@.iël'tp@..,pjl,-'')!@-i0.p..d..p'-d':9jpD''Ii.1.é,r')=-,s#=,:)k';-.p.--.-.- -'-

'ç,tI'l';ù'dë:%-.u

'tzp,,k,;t-.-w*..,- ...

.prlùx-'':di4!DL.')'p'7-';'#.-r'ft'j1-::':f.;.. ..,-.

--..-t-.

-

-

-

-.-..

'

-

''.

'

-.;-

'

.

-

''

..

'

k-pùu. .k ... '!...-..'nr.)(.

Long Short P/L Long short P/L

E-miniS&PMldcap400Index(ME) 6 6 $7,157.14 1 -OPENE-miniRussell2000Index(RTY) 2 2 $1,150.00 1 -OPENE-miniS&P500Index(E5) 10 10 $(6,937.50)

E-miniNasdaq-looIndex(NQ) 2 -OPENb. O ctober6,2020

87. On Odober6,2020,Defendantsplacedmultiplebunchedordersinthesuspense

accountatFCM 3.Asaresult,Defendantsexecutedround-triptradesinthreedifferentequity

index futurescontrads,theE-m iniS&P M idcap400 Index,E-miniRussell2000Index, andthe

E-m iniNasdaq-looIndex.

23

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 23 of 37
88. Bytheendofthetradingday,Defendantsrealizedprotitsof$8,250ontheir

rotmd-triptradesintheE-miniRussell2000Indexcontractandprofitsof$3,820ontheirroundtriptradesintheE-miniS&PM idcap400lndexcontract.Defendantsrealizedlossesof$6,100

ontheirround-triptradesintheE-m iniNasdaq-loolndexcontract.

89. Attheendoftheday,afterDefendantshadrealizedtheseprofitsandlosses,

Knmbolin sentanemailtoFCM 3containinginstnzctionsonhow toallocatetheseround-trip

tradesbetween theJerseyCityaccountandtheCryptocurrencyPoolaccount. Pursuanttothese

instructions,FCM 3allocatedtheround-trip tradesintheE-m iniS& PM idcap400lndex

contrad andtheE-miniRussell2000lndex contracttotheJerseyCity account.Pursuantto

theseinstrudions,FCM 3allocatedtheround-triptradesintheE-miniNasdaq-loocontrad to

theCryptocurrencyPoolaccount.Asaresultofthisallocation,theJersey Cityaccountobtained

$12,070inprofitsfrom theE-miniS&PM idcap400IndexcontractandtheE-miniRussell2000

lndexcontractround-triptrades.TheCryptocurrencyPoolincurredthe$6,100lossfrom theEm iniN asdaq-loolndexcontractround-triptrades.

90. Theprofitsandlossesresultingfrom Defendants'allocationofround-triptrades

betweentheJerseyCity accountandtheCryptocurrencyPoolaccountisshowninthefollowing

table:

..' ..

. --i- krt.,.)' .'.;w.. . ....$;,-'';, -xs)à ûz.jàj-..;.qj.;t.g,j.)..z-.../;-.-...-......-.-'k..t..qkljksydlj-llt7dtilTtikpp)llj:.8jlj1lhjr!,,.!!k.y..kjjqkIjl)pL1q.@.q.dhlp@l)I!1lld1ipt).ë.yrr.g.)l-(Ipl(7g1ilpptI!;V.1'...p1:2-.')7:..)'..-,r. ....Q s. ..:.'tJu81lrt'ijkd1!.'.liip;qk4$-'à.kqLjypk-,.-,-r..a.k,.,c....-...:-r...)2,-,. ..-..)ty...-

Long Short P/L tong Short P/k

E-miniRussell2000Index(RR ) 5 5 $8,250.00

E-miniS&PMidcap400Index(ME) 1 1 $3,820.00

E-miniNasdaq-looIndex(NQ) 5 5 $(6,100.00)

91.

C.

OnJanuary 12,2021,Defendantsplacedm ultiplebunchedordersinthe

January 12,2021

suspenseaccountatFCM 3.Asaresult,Defendantsexecutedround-triptradesinfourdifferent

equityindexfuttlrescontracts,theE-m iniS&P M idcap400lndex,E-miniRussell2000 Index,

24

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 24 of 37
andtheE-miniNasdaq-looIndex,andtheE-miniS&P 500lndex;aswellasround-triptradesin

theJapaneseYenfuturescontractlistedonCM E.Defendantsalsoexecutedtradesintwo

additionalFX futm es,theSwissFranccontrad andEm oFX contracttradedon CM E,thatclosed

positionsinthosecontractsDefendantshadopenedonapreviousday.

92. Bytheendofthetradingday,Defendantshadrealizedprofitsof$5,125ontheir

round-triptradesintheJapaneseYencontract,profitsof$620ontheirround-triptradesintheEminiNasdaq-looIndexcontract,andprotitsof$375ontheirround-triptradesintheE-miniS&P

500Indexcontrad.Defendantsrealizedlossesof$2,350ontheirround-triptradesintheE-mini

Russell2000contractandlossesof$6,500ontheirround-triptradesintheE-miniS&PM idcap

400lndexcontract.lnaddition,Defendantsrealizedlossesof$2,437.50ontheirtradesinthe

SwissFranccontractthatclosedapreviously-openedposition, andrealizedlossesof$2,737.50

ontheirtradesintheEuroFX contractthatclosedapreviously-openedposition.

93. Attheendoftheday,afterDefendantshadrealizedtheseprofitsandlosses,

Knmbolinsentanem ailtoFCM 3containinginstructionsonhow toallocatethesetrades

betweentheJerseyCity account,theFX Poolaccotmt,andoneofDefendants'm anaged

accounts.Pursuanttotheseinstructions,FCM 3allocatedtheround-triptradesintheJapanese

YeneontracttotheJerseyCity account.Pursuanttotheseinstructions, FCM 3allocatedthe

round-triptradesintheE-m iniNasdaq-loolndexcontract,theE-m iniS&P 500Indexcontract,

theE-m iniRussell2000lndex contract,andtheE-m iniS&P M idcap400contracttotheFX Pool

account.Ptlrsuanttotheseinstructions,FCM 3allocatedthetradesintheSwissFranccontract

andtheEuroFX contrad thatdosedpreviously-opçnedpositions,totheFX Poolaccountand

themanagedaccount.Asaresultofthisallocation,theJerseyCityaecountobtained$5,125in

profitsfrom theJapaneseYencontractround-triptrades.TheFX Poolincurredatotalof

25

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 25 of 37
$13,030inlosses,andthemanagedaccountincurredatotalof$3,587.50inlosses,from the

allocationoftherem ainingtrades.

94. Theprotitsandlossesresultingfrom Defendants'allocationoftradesam ongthe

Jersey Cityaccotmt,theFX poolaccount,andthemanagedaccountisshowninthefollowing

table:

(ilra'!.c....' .....j....7.r-. ' ,....-'.'.j.j's.,''ê''fFl''I'l)S41),I)j,-f'r.!,.l;fp.-j?,lët..hj-.tltj?-k)',.-zlj.'-)-hk)'tj)y,.4u..)/.#.$-.

,-.-.jr1..yj.i,..q.kipdlêéql.phl.drc..

.jr,tyl-t.d..i.ù.l.tj,t:,

.

r!j!),j-y,j,):j,otj;.ryjt,,k-yj,;x'-y.j.t.s-4.-j.

-

.ç$jktytjjkft,j,j,.jjr$'trj,,'-!:.j.-:.$r.2)jk.$p1':stj.k....ti,'.''pt.1-,t4@-k..':,;,.,x,

.

jr,y.-yj)!.,j!).j-j$)',:..t.l!)-j,Tkt.j.,,r-y..jy:#'.l,yj,k,.js:t;).7,j';'.jft,tj-..y-.jtjtj..'tjs'j)'.%''.:'j.-.......-.....w.i.jï.

.

.-.

;j...'-....

..

:..

.

..

.

..... ..t....'j...;.'-..

....ka.rx ...st...a . .ë-.-....w.7m.gkàkft(.. k

Long short P/L Long Short P/L Long Short P/L

YenFutures(J1) 20 20 $ 5,125.00

E-miniNasdaq-looIndex(NQ) 4 4 $ 620.00

E-mini5&P500Index(E5) 3 3 $ 375.00

E-miniRussel2000lndex(RR ) 5 5 $(2,350.00)

E-miniS&PM idcap400Index

(ME) 11 10 $(6,500.00)

SwissFrancFutures(E1) 3 $(2,437.50) 3 $(2,237.50)

EuroFXFutures(EC) 3 $(2,737.50) 2 $(1,350.00)

E. DefendantsFraudulentlyM isrepresented theTradingStrategythatSAM

W ouldUseW hen TradingfortheCryptocurrency PoolandtheFX Pool.

95. DefendantsmarketedtheCryptocurrencyPoolandtheFX Poolasemploying

tradingstrategiesfocusedoncryptocurrencyfuturesandFX futures,respectively,andoffered

sim ilarstrategiestotheM anagedAccountcustom ers.Nevertheless,Defendantsregularlytraded

avarietyoffuturescontractsotherthmzcryptocurrencyfuttzresandFX futures,suchasvarious

equity indexfuttlres,whentradingfortheCustomerAccountsandProprietaryAccountsusing

bunchedordersinthesuspenseaccountsatFCM 7and FCM 3.

96. ThePPM SfortheCryptocurrencyPool(asamendedbytheApril2019

supplement)andtheFX PoolstatedthatDefendantsmaytradeavarietyoffinancialfutures

contractsotherthan cryptocurrencyfutlzresandFX futtlresttoprovidef'urtherdiversification''or

étbroadenitsinvestmentprocesses.''However,contrarytotheim pressionDefendants'created

throughtheirrepresentationsregardingtheinvestm entstrategyparticulartoeachcom modity

pool,Defendantstradedlargequantitiesofequityindexfuturescontractsrelativeto

26

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 26 of 37
cryptocurrencyfuturesandFX futures,usingbunchedordersinthesuspenseaccountsatFCM 7

andFCM 3.

DuringtheRelevantPeriod,onlyapproxim ately55% oftheDefendants'trading

fortheCryptocurreneyPoolinvolvedcryptocurrencyfutures.AlloftheothertradesDefendants

executedandallocatedtotheCryptocurrencyPool'saccountinvolvedequityindexfutures

contracts.DuringtheRelevantPeriod,only approxim ately55% ofthetradesallocatedtotheFX

PoolaccountsinvolvedFX futures,withtheremainingtradesinvolvingequityindexfutures.

F. SAM isVicariously LiableforK am bolin'sViolationsoftheActand

Regulations.

98. Knm bolinwasadingasSAM 'Sagentandwithinthescopeofhisem ploym entfor

SAM whenKambolinfraudulentlyallocatedtradesbetweentheProprietaryAccountsandthe

CustomerAccountstogeneratetradingprofitsfortheProprietaryAccounts.Knmbolinengaged

inthefraudulentallocationsoftradesallegedhereininthecourseofexecutingtradesand

allocatingthem tocomm oditypoolsoperatedby SAM asaregisteredCPO andmanaged

accountstradedby SAM asaCTA .

99. SAM benelttedfrom Kambolin'sfraudulentallocationoftradestogenerate

tradingprofhsfortheProprietaryAccounts.SAM actedasaCTA forThorandJerseyCity, and

ThorandJerseyCitypaidSAM incentivefeescalculatedasapercentageofthetradingprotits

generatedbyKambolin'sandSAM 'StradingforThorandJerseyCitytmdertheterm softheir

agreem entswith SAM .

G. Kam bolin W astheControllingPerson ofSAM .

100. DuringtheRelevantPeriod,Kambolinwastheowner,managingm ember,and

ChiefExecutiveOftk erofSAM .DuringtheRelevantPeriod,KambolincontrolledSAM , either

directlyorindirectly,asitsowner,m anagingm ember,andChiefExecutiveOftk er.

27

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 27 of 37
101. Kambolindidnotactingoodfaithorknowinglyinduced, directlyorindirectly,

SAM 'SconductbyfraudulentlyallocatingtradesbetweentheProprietaryAccountsandthe

Custom erAccountstogenerateprofitsfortheProprietaryAecounts.

V. VIOLATIO NSO F THE COM M ODITY EXCH ANGE ACT AND COM M ISSION

REGULATIONS

COUNT ONE

ViolationofSection4b(a)(1)(A)-(C)oftheAct,7U.S.C.j6b(a)(1)(A)-(C)

(FraudinConnectionwithFutures)

(AIIDefendants)

102. Theallegationssetforth inParagraphs1through 101arere-allegedand

incorporatedhereinbyreference.

103. 7U.S.C.j6b(a),inrelevantpart,makesitunlawful:

(1) foranyperson,inorinconnectionwithanyordertomake,orthemakingof,

anycontractofsaleofany comm odityininterstatecommerceorforfuture

deliverythatismade,ortobemade,onorsubjecttotherulesofadesignated

contractm arket,fororon behalfofanyotherperson;

+ +

(A) tocheatordefraudoratempttocheatordefraudtheotherperson;

(B) willfullytomakeorcausetobemadetotheotherpersonanyfalse

reportorstatem entorwillfullytoenterorcausetobeenteredforthe

otherpersonanyfalserecordilotl

(C) willfulytodeceiveorattempttodeceivetheotherpersonbyanymeans

whatsoeverin regardtoanyorderorcontrad orthedispositionor

executionofanyorderorcontrad,orinregardtoanyad ofagency

perform ed,withrespecttoanyorderorcontractfor.. . theotherperson.

28

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 28 of 37
104. Asdescribedabove,Defendantsviolated7U.S.C.j6b(a)(1)(A)-(C)oftheAct,

inorincolmectionwithfuturescontractsmadefororon behalfofotherpersons, byknowingly

orrecklesslyalloeatingthetradesthey executedforboththeProprietaryAccotmtsandthe

Custom erAeeotmtsinamannerthatwasnotfairandequitablebutwhiehconsistently generated

tradingprofitsfortheProprietaryAccountsanddisadvantagedtheCustom erAccounts.

105. DefendantsfurtherviolatedSection6b(a)(1)(A)-(C)byknowinglyorrecklessly:

(1)misrepresentingtopoolparticipantsandDefendants'managedaccountcustomersinPPMS

andTradingAdvisoryAgreements,respedively,thatDefendantswouldallocateinvestment

opportmitiesfairlyandequitablyam ongDefendants'variouscomm oditypools,m anaged

accotmts,andtheProprietaryAccounts',and(2)misrepresentingtoparticipantsinthe

CryptocurrencyPoolandtheFX PoolthetradingstrategiesthatDefendantswould employand

thetypesoftradesDefendantswouldexecuteinthecourseoftradingforeach respective

comm oditypool.

106. Kam bolincom mittedtheacts,omissions,and/orfailuresdescribedabovewithin

thescopeofhisagency,employm ent,andofficeatSAM ;therefore,such acts,om issions, and/or

failuresaredeemedtobethoseofSAM pursuanttoSection2(a)(1)(B)oftheAct,7U.S.C.

52(a)(1)(B),andRegulation1.2,17C.F.R.j1.2(2022).

107. Ata11tim esrelevanttothisComplaint,KnmbolincontrolledSAM ,directlyor

indirectly,anddidnotactingoodfaithorknowingly induced,directlyorindirectly,SAM 'S

alegedconductinthisCount.Therefore,pursuanttoSection13(b)oftheAct,7U.S.C.

j13c(b),KambolinisliableforSAM 'Sviolationsof7U.S.C.j6b(a)(1)(A)-(C)oftheAct.

29

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 29 of 37
108. Each fraudulentordeceptiveact,includingeachinstanceinwhichDefendants

allocatedtradestogeneratetradingprotksintheProprietaryAccountsasallegedherein,is

allegedtobeaseparateanddistinctviolationofSection4b(a)(1)(A)-(C)oftheAct.

COUNT 11

ViolationsofSection4/(1)(A)-(B)oftheAct,7U.S.C.j6/(1)(A),(B)

(FraudbyaCommodityPoolOperatorandCommodityTradingAdvisor)

(Al1Defendants)

109. TheallegationssetforthinParagraphs1through 103arere-allegedand

incorporatedhereinbyreference.

110. 7U.S.C.j6/(1),inrelevantpart,makesitunlawfulforaCPO,CTA,orAPofa

CPO orCTA touse:

(Tjhemailsoranymeansorinstnlmentalityofinterstatecommerce,directlyor

indirectly

(A)toemployanydevice,scheme,orartificetodefraudanyclientorparticipant

orprospectiveclientorparticipant;or

(B)toengageinanytransaction,practice,orcourseofbusinesswhichoperatesa

fraudordeceituponanyclientorparticipantorprospectiveclientorparticipant.

111. Section1a(11)(A)(ii)oftheAct,7U.S.C.jlatl1)(A)(ii),definesaCPO,in

relevantpart,astkanyperson...whoisregisteredwiththeCommissionasagCPO).''

Section1a(12)(A)oftheAct,7U.S.C.j1a(12)(A),definesaCTA,inrelevant

part,asEûanypersonwho- forcompensationorprofit,engagesinthebusinessofadvising

others...astothevalueofortheadvisabilityoftradingin''fm urescontracts.

113. Asallegedherein,ata1ltimesrelevanttothisComplaint,SAM wasregistered

withtheCFTCasaCPOandthereforeaCPOasdetinedby7U.S.C.jlatl1)(A)(i).Ata11

30

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 30 of 37
tim esrelevanttothisComplaint,SAM wasregisteredwiththeCFTC asaCTA andactedasa

CTA byengaginginthebusinessofadvisingothersastothevalueoradvisabilityoftradingin

anyfuturesand/oroptionsforcom pensationofprotk,includingbyhavingdiscretionarytrading

authorityovertheaccountsofSAM 'Smanagedaccountcustom ers.

114. Ata11tim esrelevanttothisComplaint,Kam bolinwasregisteredwiththeCFTC

asanAP ofSAM .Knm bolinactedasanAPofaCPO becausehewasapartner,officer,

employeeand/oragentofSAM ,aregisteredCPO,andhesolicitedandacceptedfunds,

securities,orpropertyfrom poolparticipantsforSAM forparticipationinacomm oditypool.

KambolinactedasanAP ofaCTA becausehewasapartner,officer,em ployee,consultant,or

agentofSAM ,aregisteredCTA,andwasinvolved inthesolicitationofaclients'orprospective

clients'discretionaryaccounts.

DuringtheRelevantPeriod,Defendantsthroughtheuseofthem ailsorother

meansorinstrumentalitiesofinterstatecommerce(includingthroughtheuseofthetelephone

andintenwt),violated7U.S.C.j6o(1)(A)-(B)byknowinglyorrecklesslyallocatingthetrades

theyexecutedforboththeProprietaryAccountsandtheCustom erAccotmtsinam annerthat

wasnotfairandequitablebutwhichconsistentlygeneratedtradingprotksfortheProprietary

AccountsanddisadvantagedtheCustom erAccounts.

116. Defendantsfurtherviolated7U.S.C.j6t)(1)(A)-(B)byknowinglyorrecklessly:

(1)misrepresentingtopoolparticipantsandDefendants'managedaccountcustomersinPPM S

andTradingAdvisoryAgreem ents,respectively,thatDefendantswouldallocateinvestment

opportunitiesfairlyandequitablyam ongDefendants'variouscommoditypools,managed

accounts,andtheProprietaryAccounts;and(2)misrepresentingtoparticipantsinthe

CryptocurrencyPoolandtheFX PoolthetradingstrategiesthatDefendantswouldemployand

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 31 of 37
thetypesoftradesDefendantswouldexecuteinthecourseoftradingforeachrespective

commoditypool.

117. Kambolin committedtheacts,omissions,and/orfailuresdescribedabovewithin

thescopeofhisagency,employm ent,andofticeatSAM ;therefore,suchacts,om issions,and/or

failuresaredeemedtobethoseofSAM pursuantto7U.S.C.j2(a)(1)(B),and17C.F.R.j1.2.

118. Ata11timesrelevanttothisComplaint,Kam bolincontrolledSAM ,directlyor

indiredly,anddidnotactingoodfaith orknowinglyinduced,directlyorindirectly,SAM 'S

alegedconductinthisCount.Therefore,pursuantto7U.S.C.j13c(b),Knmbolinisliablefor

SAM'Sviolationsof7U.S.C.j6/(1)(A)-(B).

119. Eachfraudulentordeceptiveact,includingeachinstanceinwhichDefendants

allocatedtradestogeneratetradingprofitsintheProprietaryAccountsasallegedherein,is

allegedtobeaseparateanddistinctviolationof7U.S.C.j6o(1)(A)-(B).

COUNT III

ViolationofRegulation1.35(b)(5)(iv)(B),17C.F.R.j1.35(b)(5)(iv)(B)(2022)

(InequitableAllocationofOrders)

(A11Defendants)

120. TheallegationssetforthinParagraphs1through 103arere-allegedand

incorporatedhereinbyreference.

121. 17C.F.R.j1.35(b)(5)(iv)states,inrelevantpart,thatlsorderseligibleforpostexecutionallocationmustbeallocatedbyaneligibleaccountm anagerinaccordancewiththe

following:

(B)Allocationsmustbefairandequitable.Noaccountorgroupofaccountsmay

receiveconsistentlyfavorableorunfavorabletreatm ent.''

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 32 of 37
122. Atalltim esrelevanttothisComplaint,SAM wasan eligibleaccotmtmanager

underRegulation1.35(b)(5)(i)(A),17C.F.R.j1.35(b)(5)(i)(A)(2022),asaCTA registeredwith

theComm ission.ThebtmchedordersDefendantsplacedcollectivelyonbehalfoftheCustom er

AccountsandtheProprietm'yAccountswereeligibleforpost-executionallocation.

DuringtheRelevantPeriod,SAM violated17C.F.R.j1.35(b)(5)(iv)(B)by

knowinglyorrecklesslyallocatingthetradesitexecutedforboththeProprietaryAccountsand

theCustom erAccotmtsin amannerthatwasnotfairandequitablebutwhichconsistently

generatedtradingprofitsfortheProprietaryAccountsanddisadvantagedtheCustomer

Accounts.

124. Ata11tim esrelevanttothisComplaint,Kam bolincontrolled SAM ,directly or

indirectly,anddidnotactingoodfaithorknowinglyinduced,directlyorindirectly,SAM 'S

allegedconductinthisCount.Therefore,pursuantto7U.S.C.j13c(b),Kambolinisliablefor

SAM 'Sviolationsof17C.F.R.j1.35(b)(5)(iv)(B).

125. Each instanceinwhichDefendantsallocatedtradesunfairlyandinequitably

allocatedtradestogeneratetradingprofitsintheProprietaryAccotmtsasallegedherein,is

allegedtobeaseparateanddistinctviolationof17C.F.R.j1.35(b)(5)(iv)(B).

VI. RELIEF REQUESTED

W HEREFORE,theComm issionrespectfullyrequeststhatthisCourt,asauthorizedby

Section6coftheAct,7U.S.C.j13a-1,andpursuanttoitsownequitablepowers:

A. FindthatDefendantsviolatedSections4b(a)(1)(A)-(C)and4o(1)(A)-(B)ofthe

Act,7U.S.C.jj6b(a)(1)(A)-(C),6o(1)(A)-(B),andRegulation1.35(b)(5)(iv)(B),

l7C.F.R.j1.35(b)(5)(iv)(B)(2022);

EnteranorderofpermanentinjunctionenjoiningDefendantsandtheiraffliates,

agents,servants,employees,successors,assigns,attonwys,andallpersonsin

33

B.

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 33 of 37
activeconcertwiththem ,whoreceiveactualnoticeofsuchorderbypersonal

serviceorotherwise,from engagingintheconductdescribedaboveinviolationof

7U.S.C.jj6b(a)(1)(A)-(C)and6J(1)(A)-(B)and17C.F.R.j1.35(b)(5)(iv)(B).

EnteralaorderofpennanentinjunctionrestrainingandenjoiningDefendantsand

theiraffiliates,agents,servants,employees,successors,assigns,attorneys,anda11

personsinactiveconcertw iththem,from directlyorindirectly:

1) Tradingonorsubjecttotherulesofanyregisteredentity(asthatterm is

definedinSectionla(40)oftheAct,7U.S.C.j1a(40);

Enteringintoanytransactionsinvolvingûscommodityinterests''(asthat

term isdefinedinRegulation1.3,17C.F.R.j1.3(2022),foraccotmts

heldinthenam eofanyDefendantorforaccountsin whichanyDefendant

hasadirectorpersonalinterest;

HavinganycommodityinteresttradedonanyDefendant'sbehalf;

Controllingordirectingthetradingfororon behalfofanyothezpersonor

3)

4)

entity,whetherbypowerofattorneyorotherwise,inanyaccount

involvingcommodityinterest',

Soliciting,receiving,oracceptinganyfundsfrom anypersonforthe

purposeofptlrchasingorsellinganycom modityinterests;

5)

6) Applyingforregistrationorclaiminganyexemptionfrom registration

withtheComm issioninanycapacity,andengaginginanyactivity

requiringsuchregistrationorexemption from registrationwiththe

Commission,exceptasprovidedforinRegulation4.14(a)(9),17C.F.R.

j4.14(a)(9)(2022);and

34

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 34 of 37
Actingasaprincipal(asthattenuisdefinedinRegulation3.1(a),

17C.F.R.j3.1(a)(2022),agentoranyotherofficeroremployeeofany

personregistered,exemptedfrom registration,orrequiredtotheregistered

withtheCommissionexceptasprovidedforin17C.F.R.j4.14(a)(9).

EnteranorderdirectingDefendants,aswellasanythird-partytransfereeand/or

successorsthereof,todisgorge,pursuanttosuchprocedureastheCourtmay

order,allbenefitsreceived including,butnotlim itedto,salaries,com missions,

loans,fees,revenues,andtradingprofitsderived from ,directly orindirectly,the

actsorpracticeswhichconstituteviolationsoftheActandRegulationsas

describedherein,andpre-andpost-judgmentinterest;

EnteranorderdirectingReliefDefendants,includinganythird-partytransferee

and/orsuccessorsthereof,todisgorge,pursuantto suchprocedureastheCotlrt

mayorder,al1benefitsreceivedincluding,butnotlimitedto,salaries,

E.

comm issions,loans,fees,revenues,andtradingprofitsderived,directlyor

indirectly,from actsorpracticeswhichconstituteviolationsoftheActor

Regulationsasdescribedherein,includingpre-andpost-judgmentinterest;

EnteranorderdirectingDefendants,aswellasanysuccessorsthereof,tomake

fullrestitution,pursuanttosuchprocedureastheCourtmayorder,toevery

customer,investor,poolparticipantwhosefundsanyDefendantreceived,or

F.

causedanotherpersonorentitytoreceive,asaresultoftheactsandpractices

constitutingviolationsoftheActandRegulations,asdescribedherein,including

pre-andpost-judgmentinterest;

35

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 35 of 37
G. EntezanorderdirectingDefendants,aswellasanysuccessorsthereotltorescind,

ptlrsuanttosuchprocedureastheCourtm ayorder,a1lcontractsandagreem ents,

whetherexpressorim plied,enteredintobetween,withoramongDefendantsand

anyofthepoolparticipantsorothercustom erswhosefundswerereceivedby

Defendantsasaresultoftheactsandpracticeswhichconstitutedviolationsofthe

ActandRegulations,asdescribedherein;

EnteranorderdirectingDefendantstopaycivilm onetarypenaltiesassessedby

theCourt,inannmountnottoexceedthepenaltyprescribedbySection6c(d)(1)

oftheAct,7U.S.C.j13a-1(d)(1),asadjustedforinflationpursuanttotheFederal

H .

CivilPenaltiesIntlationAdjustmentActlmprovementsActof2015,Pub.L.114-

74,tit.Vll,j701,129Stat.584,599-600,seeRegulation143.8,17C.F.R.

j143.8(2022),foreachviolationoftheActandRegulations,asdescribedherein;

EnteranorderrequiringDefendantstopaycostsandfeesaspermittedby28

U.S.C.jj1920and2413(a)(2)and

1.

EnteralzorderforsuchotherandfurtherreliefastheCourtmaydeem necessary

andappropriatelmderthecircum stances.

36

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 36 of 37
Dated:April24,2023 Respectfullysubm itted,

COM M ODITY FUTURES TM DING

COM M ISSION

ThomasL.Simek(S.D.Fla.//A5502134)

tsimek@cftc.gov

RebeccaJelinek(S.D.Fla.#A5503048)

rielinek@cftc.gov

2600GrandBoulevard,Suite210

KansasCity,M O 64108

(816)960-7700(telephone)

(816)960-7750(facsimile)

Case 1:23-cv-21527-RNS Document 1 Entered on FLSD Docket 04/24/2023 Page 37 of 37