Release Number 7243-15
September 24, 201
CFTC Orders Russian Resident Yakov Shlyapochnik and His Connecticut-Based Company, Nord Capital Advisors, LLC, to Pay a $280,000 Penalty for Failing to Disclose Company’s Principal in Registration Filings and for Company’s Fraudulent Solicitation
Shlyapochnik and Nord Capital Advisors, LLC Are Permanently Barred from the U.S. Commodities Industry
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today entered an Order requiring Russian citizen, Yakov Shlyapochnik, and his Connecticut-based company, Nord Capital Advisors, LLC (NCA), to jointly and severally pay a $280,000 civil monetary penalty for failing to disclose NCA’s principal in registration filings and for engaging in fraud in soliciting prospective clients by failing to disclose material changes in NCA’s algorithmic trading program. The CFTC Order also imposes permanent trading and registration bans on Shlyapochnik and NCA and prohibits them from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged.
The Order finds that from September 2011 through August 2014, NCA, a registered Commodity Trading Advisor, failed to disclose in registration filings with the National Futures Association (NFA) that Nord Capital Financial Services Ltd. (NCFS) was acting as NCA’s principal. According to the Order, because NCA received capital primarily from NCFS, NCFS was a principal of NCA. The Order finds that by failing to update NCA’s registration to disclose NCFS as a principal and by failing to disclose NCFS as a principal in annual registration updates filed with the NFA, NCA violated Sections 9(a)(3) and 6(c)(2) of the CEA. The Order finds that Shlyapochnik, a registered Associated Person and controlling person of NCA, knowingly induced, and is therefore liable for, NCA’s violations.
The Order also finds that NCA disseminated to prospective clients false and misleading marketing materials, which failed to disclose material changes in the algorithmic trading system NCA was using. According to the Order, beginning in December 2012 through July 2014, NCA used a different trading program than it used prior to December 2012. Notwithstanding this fact, as early as February 2013 through July 2014, NCA disseminated advertising materials, which falsely and misleadingly presented NCA’s track record as if NCA had used the same trading program continuously since 2011. According to the Order, this conduct violated Sections 4o(1)(A) and (B) of the CEA and CFTC Regulations 4.41(a)(1) and (2). The Order also finds that Shlyapochnik controlled NCA and knowingly induced NCA’s violations and as such is liable for NCA’s violations of the CEA and CFTC Regulations.
The CFTC thanks the NFA for its assistance in this matter. The CFTC also thanks the Central Bank of the Russian Federation and the Cyprus Securities and Exchange Commission for their assistance in this matter.
CFTC Division of Enforcement staff members responsible for this case are Candice Aloisi, R. Stephen Painter, Jr., David W. MacGregor, Lenel Hickson, Jr., and Manal M. Sultan. Dmitriy Vilenskiy also assisted in this case.
Last Updated: September 24, 2015