CySEC makes Prior Capital pay €100k to settle charges

Karthik Subramanian

The Cyprus Securities and Exchange commission (CySEC) has announced today that it was settling all the charges that were made on Prior Capital Cy Ltd, on the basis of payment of a fine of 100,000 euros by the firm.


For long, the CySec had been viewed as a lenient regulator and so, firms that did not have enough capital to get a FSA certification or those that handled risky investments, generally chose Cyprus as their next destination as the regulator was lenient, it was a small country that was welcoming investments and new companies and it was also in Europe which was a good sales pitch for companies.

But not all tales that begin well, end well. So, there came a time a few years back when the CySEC woke up from its slumber and realised that there are too many companies in Cyprus engaged in financial services that weren’t serving its customers well. It also began to realise that the country was being used as a base for many financial scams.

This is not a good advertisement for any country and so the government, and hence the CySEC decided to crack the whip. Regulations were made extra tight and the CySEC began strict auditing of all the firms that were regulated by it. No leniency was shown anymore and 100s of companies were put on the watchlist based on these audits. The honeymoon period was well and truly over.

This cleanup and strict regulatory practices continue to this day and as part of this exercise, CySEC reached a settlement with the executive Board Members of Prior Capital Cy Ltd , Messrs. Konstantin Yasnov, Vladimir Zalogin and Ekaterina Zalogina for a possible violation of Τhe Investment Services and Activities and Regulated Markets Law of 2017 .

CySEC mentioned that this was regarding  the compliance of the Company’s Board of Directors with article 10(1) of the Law for the period July 2018 – March 2020 . CySEC confirmed that the settlement was reached for an amount of €100.000 and that the directors had managed to pay it.

It may be noted that recently, CySEC had reached a settlement with TeleTrade for an amount of €120k for violation of the same law and had imposed a total fine of €3.9 million during the course of 2020 on several companies.

It remains to be seen whether all these actions would act as a deterrent to many people who want to run scams under the cloak of regulation or whether it just forces such people to shift their base elsewhere and carry on their business from there. This is the reason why all regulatory authorities need to cooperate more with each other to ensure that such persons do not use this strategy to cheat more investors and bring to shame the regulatory authorities and the financial services domain as a whole.

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