UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

NORD CAPITAL ADVISORS LLC 

and 

Y AKOV SHL Y APOCHNIK 

CFTC Docket No. CRAA 14-01 

v. OPINION AND ORDER 

NATIONAL FUTURES ASSOCIATION 

On August 15, 2014, Nord Capital Advisors LLC ("Nord Capital") and Yakov 

Shlyapochnik, one of Nord Capital's principals and its associated persons (collectively, 

"Petitioners"), filed a petition to stay the effective date of a Member Responsibility Action and 

Associate Responsibility Action ("MRA/ ARA") issued by the National Futures Association 

("NF A"), pending a hearing by the NF A. In relevant part, the MRA/ ARA prohibits Petitioners, 

and anyone acting on their behalf, from: (1) soliciting for or trading in accounts owned or 

controlled by them, except to liquidate or conduct risk reducing trades; and (2) disbursing funds 

from any customer accounts or accounts owned or controlled by them without prior NF A 

approval. MRA/ ARA at 1. NF A issued the MRA/ ARA because Petitioners did not turn over 

certain records relevant to an NF A investigation of two complaints involving possible fraudulent 

conduct by Shlyapochnik and other Nord Group entities. 

The MRA/ARA was issued July 31,2014, and was effective immediately. On August 

13, 2014, Petitioners asked the NF A for a post-deprivation hearing to be held in September, 
which hearing was granted and is now scheduled for September 15 and 16. Petitioners filed their 

petition for a stay on August 15, and the NF A filed its opposition on August 25. For the 

following reasons, we deny the petition for stay. 

BACKGROUND 

I. 

Nord Capital is located in Stamford, Connecticut, and has a branch office in Moscow, 

Russia. Ahlfeld Aff. ~ 2. It was founded by Shlyapochnik in order to bring a trading program 

developed and initially offered in Russia to U.S. investors, though to date its only customer has 

been Nord Capital Financial Services ("NCFS"), an entity organized under the laws of Bermuda. 

Shlyapochnik Decl. ~~ 2-3; Beninger Decl. ~ 4. Nord Capital has been registered with the 

Commission as a Commodity Trading Advisor ("CTA") and an NFA Member since July 14, 

2011, and became a registered Commodity Pool Operator on October 5, 2012. Ahlfeld Aff. ~ 2. 

Since June 20, 2014, Nord Capital has operated three commodity pools, none of which appear to 

have any assets. Ahlfeld Aff. ~3. It has had four listed principals over time: (1) Shlyapochnik, 

who became an Associated Person ("AP") ofthe firm in 2011, Ahlfeld Aff. ~ 4, and is its Chief 

Investment Officer, Shlyapochnik Decl. ~ 3; (2) Donald E. Worley, who also became an AP of 

the firm in 2013 and is its Chief Executive Officer, though he has no ownership interest, Ahlfeld 

Aff. ~ 5; (3) Nord Capital Advisors Holdings LLC (owned solely by Shlyapochnik), Ahlfeld Aff. 

~ 6; and (4) NCFS, at least from July 13, 2011 through September 16,2011, Opposition at 8. 

Nord Capital had one account in its own name at a futures commission merchant ("FCM 

1 ")with a net liquidating equity of $1,000, Ahlfeld Aff. ~ 13, and NCFS had three accounts 

between FCM 1 and a second FCM ("FCM 2"). Nord Capital acts as the CTA for NCFS's first 

account at FCM 1. Ahlfeld Aff. ~ 14. Since 2011, there has been recurrent and significant 

2 
activity in this account, with deposits totaling about $48 million and withdrawals around $49 

million. !d. Shlyapochnik was listed as an employee for this account at FCM 1. NCFS's second 

account at FCM 1 had similar activity, with deposits amounting to $19 million and withdrawals 

totaling approximately $9 million over the life of the account. !d. Shlyapochnik was listed as a 

signatory, owner and trader for this account. !d. NCFS had its third account, for which Nord 

Capital also acts as CTA, at FCM 2. Ahlfeld Aff., 15. Since inception, deposits in that account 

exceeded $30 million and withdrawals amounted to approximately $25 million. Id. 

Shlyapochnik signed certain of these account documents as the "attorney" for NCFS. ld. 

The relationship between Nord Capital and NCFS is mainly undisputed. NCFS was o~e 

of its principals for a time (and may still be), and has been its sole customer. In addition, Nord 

Capital regularly received deposits from NCFS presently totaling $1.8 million, and entered into a 

loan agreement with NCFS that allowed Nord Capital to borrow up to $200,000 from NCFS. 

Ahlfeld Aff. , 16. The precise relationship between Shlyapochnik and NCFS, however, is a 

matter of some dispute. FCMs 1 and 2 provided NF A with documents indicating variously that 

Shlyapochnik may be the attorney, employee, or owner ofNCFS. Further documents provided 

by FCM 2 indicate that NCFS is 100% owned-via a holding company-by an entity called 

Lexor Foundation, and these documents list Shlyapoclmik as the primary beneficiary and the 

"Ultimate Beneficial Holder" of Lex or. Ahlfeld Aff. , 15. On the other hand, Shlyapochnik 

submitted a declaration from Victoria Beninger, a board member of Lex or, who states that 

Shlyapochnik only trades on NCFS's behalf in the United States, Beninger Decl., 5, and that he 

has been "entirely excluded from the circle of beneficiaries" of Lex or, which was founded by his 

father, because "recent events have impaired [its] value." Beninger Decl., 2; see also 

Shlyapochnik Decl. , 4 (noting he was removed "[a]fter the NFA's action"). 

3 
II. 

On July 17, 2014, NF A received a complaint from a company in Cyprus ("Cyprus 

Company") regarding Shlyapochnik and various Nord Group entities, including NCFS and Nord 

Capital Advisory Services ("Nord Advisory"). Ahlfeld Aff. ~ 7. Cyprus Company states the 

belief that Shlyapochnik was the "ultimate beneficiary owner" ofNord Advisory and NCFS. !d. 

According to the complaint, Cyprus Company invested $1.5 million with Nord Advisory in 

September 2010, and that although it received positive investment rep01is for about three years 

thereafter, when it attempted to close its account in late 2013, it was told that Nord Advisory 

could not liquidate Cyprus Company's assets because of the effect of quantitative easing by the 

Federal Reserve on the financial markets. Ahlfeld Aff. ~~ 7-8. 

NFA thus began its investigation of Petitioners on July 21, 2014. Ahlfeld Aff. ~ 10; 

Worley Dec!. ~ 4. After the NF A commenced its investigation, it received a second complaint of 

fraud from an individual regarding Nord Capital Group, for which Shlyapochnik serves as 

founder and chairman of the board. Ahlfeld Aff. ~ 22. The investigation reached an impasse 

when NF A requested the banlc records ofNCFS. Petitioners claimed they have no ownership, 

custody or control over the banlc records, and that because NCFS is a Bermuda-based entity, 

providing these documents might violate foreign privacy, secrecy and contract law. Beninger 

Decl. ~~ 3-7, 10; Shlyapochnik Dec!. n 5, 8. But NFA claims these bank records are critical to 

its investigation, and on July 31, 2014, issued the MRA/ARA, explaining: 

NF A has been unable to complete its exam and investigation to whether Shlyapochnik is 

fit to be an NF A Associate and whether he and [NCFS] are fit to be listed as principals of 

Nord Capital; to determine the ultimate source of funds that have been contributed by 

[NCFS] as capital for Nord Capital; and to ensure that Nord Capital has properly 

disclosed all persons who contributed 10% or more of its capital. 

MRA/ARA at 8 ~ 26. 

4 
DISCUSSION 

I. 

Petitioners bring this petition pursuant to Commission Regulation § 171.41, which 

requires the Commission to consider: 

(1) Whether, in the circumstances presented, the notice and opportunity for a hearing 

provided by the National Futures Association are consistent with principles of 

fundamental fairness; and 

(2) The likelihood that the denial of the petition would result in irreparable harm to 

petitioner; and 

(3) The effect a grant of the petition would have on the interests of the National Futures 

Association; and 

( 4) The effect a grant or denial of the petition would have on the public interest. 

17 C.F.R. § 171.41(d). Each ofthese factors weighs in favor of maintaining the status quo 

pending the hearing, to be held starting September 15, 2014. 

1. Fundamental Fairness. Petitioners' argument that they were deprived of fair 

process has essentially two pmis. First, Petitioners assert that the MRA/ ARA was issued without 

justification because Shlyapochnik does not own or control NCFS and there is no requirement 

that an NFA member or associated person maintain records "of unrelated business activities." 

Petition at 8-11. But NF A Compliance Rule 3-15(a) permits the NF A to take summary action, or 

pre-hearing action, "where the President, with the concurrence of the NF A Board of Directors or 

Executive Committee, has reason to believe that the summary action is necessary to protect the 

commodity futures markets, customers, or other Members or Associates." !d. (emphasis added). 

And while the Petitioners believe that NF A's "reason[ s] to believe" are erroneous, the standard is 

a threshold one, Weinberg v. NFA, CFTC Docket Nos. CRAA 86-1, 86-2, 1986 WL 66179, *7 

5 
( 1986), 1 which we find has been met at this stage in the proceedings. Petitioners concede that "it 

is understandable why NF A may have been confused by the varying descriptions of Mr. 

Shlyapochnik's connection to NCFS in account applications" provided to NFA by FCMs 1 and 

2. Petition at 10. And their own evidence attempting to clarify this asserted confusion is 

conclusory and vague. 

For example, in an effort to emphasize the distance between himself and the Foundation that 

purportedly controls NCFS, Shlyapochnik states that "[u]ntil the NFA's action, I was one of the 

beneficiaries of the Lexor Foundation," but that "[a]fter the NFA's action, I was excluded from 

the beneficiaries." Shlyapochnik Decl. ~ 4. The timing of such exclusion-apparently occurring 

in the days immediately following the investigation-would seem to supp01i the NF A and there 

is no evidence as to precisely why he was so excluded. Fmiher, Beninger's Declaration seems 

inconsistent with Shlyapochnik's declaration on the issue of whether Shlyapochnik in fact traded 

on behalf ofNCFS. Compare Beninger Decl. ~ 5 (noting he was authorized to trade), with 

Shlyapochnik Decl. ~ 6 (stating he "never personally traded on these accounts"). Finally, 

Petitioners assert that the account records of FCMs 1 and 2, which alternately described 

Shlyapochnik as an employee, owner, trader or attorney for NCFS, were flawed because they 

were completed by non-lawyers and non-native English speakers. Petition at 9-10. Even 

assuming the veracity of those assertions, Petitioners' claim does not establish that NF A 

deprived them of fair process in finding reason to believe, based in part on this evidence, that 

summary action was necessary. 

Second, Petitioners contend that "the opportunity for a post-deprivation hearing is little 

consolation" and violates fundamental fairness when an MRA/ ARA is issued without "solid 

1 This Order was affirmed by Weinberg v. CFTC, 699 F. Supp. 808 (C.D. Cal. 1988), a.ff'd 884 

F.2d 1396 (9th Cir. 1989). 

6 
legal basis." Petition at 12. But it is well established that sufficient post-deprivation procedures 

foreclose these types of procedural due process claims, see, e.g., Sloan v. Dep 't of Housing & 

Urban Development, 231 F.3d 10, 18-19 (D.C. Cir. 2000); Weinberg, 1986 WL 66179 at *6, and 

Petitioners do not dispute that they received notice of their rights to petition the Commission for 

a stay of the MRA/ ARA and request a hearing by the NF A. When Petitioners requested that 

hearing, NF A scheduled it promptly on dates Petitioners stated they were available. 2 

Accordingly, Petitioners are not deprived of fundamental fairness. 

2. Irreparable Harm. Petitioners identify four alleged injuries they argue constitute 

"irreparable harm," none of which rise to that level. First, they contend that their plans to offer 

Nord Capital's trading program to U.S. investors have been halted by their inability to solicit 

clients or conduct trading activity, but the loss of income from such a U.S. offering does not 

amount to irreparable harm. In re Gilchrist, eta!., CFTC Docket No. 83-58, 1991 WL 88482, *2 

(1991) (loss of income and impaired ability to earn a future living insufficient). Second, they 

allege that Nord Capital cannot pay its ordinary business expenses such as payroll and rent, but 

subsequent to Petitioners' petition to the Commission, NF A has apparently provided Nord 

Capital with the authorization to pay certain of its current business expenses. Opposition at 18-

19. Third, they allege that NCFS can no longer rely on trading profits from its three frozen 

accounts at FCMs 1 and 2 to pay its operational expenses, but even assuming harm to a 

purported principal were tantamount to direct injury to the Petitioners, they provide no evidence 

of what those NCFS expenses are and how they may have been funded out of the frozen 

accounts in particular, without which the Commission has no basis to evaluate whether such 

injuries exist and are irreparable. See, e.g., Stephen Bronte Advisors, LLC v. NFA, CFTC Docket 

2 Mr. Shlyapochnik has indicated to the NF A that he does not intend to attend the hearing. 

7 
No. CRAA 02-02, 2001 WL I734943, *I & n.3 (200I) (finding affidavit purpmiing to link the 

financial loss to an inability to receive treatment for a life threatening illness too vague). Further, 

inasmuch as Petitioners characterize NCFS as a customer ofNord Capital, the alleged harm 

would be insufficient because the loss of trading profits to customers does not constitute 

irreparable harm. Jordan Assets Ltd. v. NFA, CFTC Docket No. CRAA 06-04, 2006 WL 

28I8823, *2 (2006). Fomih, Petitioners contend that affiliated investment companies that are 

part of the Nord Capital Group have lost Russian investors following a Forbes Russia miicle on 

the NF A's action, but to the extent that alleged harm has already happened, it cannot be 

redressed by a stay; and to the extent this is cast as evidencing a reputational injury, that cannot 

sustain a claim of irreparable harm. In re Mayer, CFTC Docket No. 92-2I, I998 WL 135827, *I 

(1998). 

3. Effect of Stay on NF A. NF A Compliance Rule 2-5 broadly requires Members 

and Associates to cooperate with NF A in its investigations of them, and such cooperation is key 

to effective self-regulation. As the district court noted in Weinberg, 699 F. Supp. at 8I2-I3, 

"[ w ]ith the public interest in mind NF A was left no alternative other than to summarily issue" an 

MRA when the target of the investigation refused to provide NF A with his banking records. 

This may be the same situation we face here (Petitioners will have their opportunity to argue 

otherwise in one week), and staying the NFA's MRA/ARA might impair NFA's ability to elicit 

cooperation to conduct its investigations. 

4. Effect of Stay on Public. Petitioners contend that because Nord Capital currently 

has no U.S. customers, staying the MRA/ARA cannot impact the U.S. investing public. Petition 

at I3-14. But they concede that they intended to solicit and trade funds from U.S. investors, 

Shlyapochnik Decl. ~ 3, and so the public clearly may be at risk if the fraud allegations made to 

8 
the NF A are true. Given the seriousness of these concerns and NF A's reasoned basis for its 

action we find that the public interest does not favor our restraining NF A from securing 

cooperation with its investigation. 

CONCLUSION 

Based on the foregoing, we deny this petition for a stay. 

IT IS SO ORDERED. 

By the Commission (Chairman MASSAD and Commissioners WETJEN, BOWEN, and 

GIANCARLO). 

Dated: September 15, 2014 

9 

Christopher J. I rkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission