Vyacheslav Nassof, President of New York firm Falco & Stevens, Inc., was hit with over $4.4 million in penalties following a court order issued January 4, 2007, by U.S. District Judge Shira A. Scheindlin in the Southern District of New York. Nassof, of Brooklyn, New York, and his company were found to have defrauded investors in the sale of illegal foreign currency (forex) futures contracts.
The CFTC initially sued Falco & Stevens and Nassof on March 3, 2006, alleging fraudulent practices. The court determined that between August 2005 and March 2006, Nassof and his firm engaged in a scheme to cheat customers. This included providing fabricated performance histories, downplaying the inherent risks of forex trading, and issuing falsified account statements.
Specifically, the order requires Nassof and Falco & Stevens to make restitution totaling $4,464,607.91, plus accrued interest, to the defrauded investors. Each defendant was also assessed a civil monetary penalty of $260,000 – $130,000 for each of the two violations cited by the CFTC. The court further mandated the disgorgement of all profits gained through the illegal activities.
The investigation revealed that Nassof misappropriated client funds, transferring the money to overseas accounts linked to businesses with no legitimate forex trading operations. The CFTC continues to pursue cases against individuals and firms engaging in fraudulent practices targeting investors.
The case was led by CFTC staff members Phil Rix, Joseph Rosenberg, Steven Ringer, Lenel Hickson, Stephen J. Obie, Richard Wagner, and Vince McGonagle.
Source: CFTC.gov
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