WASHINGTON, D.C. – Yakov Shlyapochnik, a Russian citizen residing in Connecticut, has been penalized by the Commodity Futures Trading Commission (CFTC) for fraud and failing to disclose critical information in registration filings. The CFTC issued an order on September 24, 2015, requiring Shlyapochnik and his firm, Nord Capital Advisors, LLC (NCA), to jointly pay a $280,000 civil monetary penalty.
The CFTC found that from September 2011 through August 2014, NCA failed to disclose that Nord Capital Financial Services Ltd. (NCFS) acted as its principal in filings with the National Futures Association (NFA). NCA received most of its capital from NCFS, making NCFS a controlling entity that should have been disclosed. This failure to update registration documents violated sections 9(a)(3) and 6(c)(2) of the Commodity Exchange Act (CEA).
Shlyapochnik, as a registered Associated Person and controlling person of NCA, knowingly allowed these violations to occur, making him liable for NCA’s actions. Furthermore, the CFTC determined that NCA misled prospective clients by disseminating false marketing materials regarding its algorithmic trading program.
Beginning in December 2012, NCA implemented a new trading program but continued to present its performance history as if the original program had been used consistently since 2011. This deceptive practice, which continued through July 2014, violated sections 4o(1)(A) and (B) of the CEA, as well as related CFTC regulations. Shlyapochnik was again found to have knowingly induced these violations, and is therefore liable.
In addition to the financial penalty, the CFTC order imposes permanent trading and registration bans on both Shlyapochnik and NCA, prohibiting them from any further violations of the CEA and CFTC regulations. The CFTC acknowledged the assistance of the NFA, the Central Bank of the Russian Federation, and the Cyprus Securities and Exchange Commission in the investigation.
Source: CFTC.gov
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