For Release: January 4, 2007
New York Firm Sanctioned for Defrauding Investors in Excess of $4.4 Million Dollars in a Foreign Currency (Forex) Scam
U.S. District Court Judge Enters Order Imposing Monetary and Other Penalties against Falco & Stevens, Inc. and its President
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable Shira A. Scheindlin, a United States District Court Judge in the Southern District of New York, entered an order imposing monetary sanctions of over $4.4 million, a permanent injunction, and other relief against Falco & Stevens, Inc., a New York firm, and the firm’s President, Vyacheslav Nass of Brooklyn, New York.
Specifically, the order requires defendants to make restitution to defrauded investors in the amount of $4,464,607.91 (plus interest) and each was ordered to pay a civil monetary penalty of $260,000, consisting of $130,000 for each of the two violations charged by the CFTC. The defendants were further ordered to disgorge all benefits received from their illegal acts and practices.
CFTC Filed a Complaint Against Defendants in March 2006
This order stems from the CFTC's continuing efforts to identify, investigate, and file suit against companies and individuals who defraud consumers and the investing public. The defendants were sued by the CFTC on March 3, 2006, for engaging in fraud in the sale and solicitation of illegal foreign currency (forex) futures and for receiving the ill-gotten gains from the sale of these forex contracts (see CFTC Press Release 5166-06, March 15, 2006).
The court found that, from at least August 2005 through March 2006, defendants Falco & Stevens, Inc. and Vyacheslav Nass cheated or defrauded customers by, among other things, providing fictitious track records, misrepresenting the risks involved in trading foreign currency, issuing false account statements reflecting trading activity that did not occur, and, ultimately, misappropriating client funds by wiring the money to overseas accounts in the names of businesses that did not engage in any foreign exchange trading activity.
The following CFTC staff members are responsible for this case: Phil Rix, Joseph Rosenberg, Steven Ringer, Lenel Hickson, Stephen J. Obie, Richard Wagner, and Vince McGonagle.
Last Updated: April 24, 2007