Back in February, FINRA informed John Thomas Financial founder Anastasios “Tommy” Belesis, he of rallies for Wall Street and Wall Street 2: Money Never Sleeps fame, that he "may face disciplinary action on a claim that he artificially inflated the price of a stock," while the Postreported that the firm was being probed by the FBI and the SEC. According to the firm's lawyer, Robert Bursky, "There is not a shred of evidence that suggests there is an ongoing inquiry by the FBI," and if you asked David Pitts, a spokesman for John Thomas, if the brokerage is a boiler room, which Bloomberg did, he'd say it is not (and that, on the contrary, "it helps real companies raise money and provides honest advice to investors"). Regardless of whether or not any of the allegations are true, a few business practices one might want to avoid if questions like "is this place legit" or "is this business entirely modeled after 2000's Boiler Room" are being raised include:
- Using "Rocky" to get pumped up for calls with potential customers.
John Thomas’s 40,000-square-foot offices on the 23rd floor of 14 Wall St., the pyramid-topped former headquarters of Bankers Trust, are decorated with a statue of a bull, big-screen televisions and a vending machine stocked solely with Red Bull. Some brokers rub the statue for luck as they walk in at 7:30 a.m., then practice their sales pitches with one another while speakers blast music from the “Rocky” movies.
- Oddly intense policies about facial hair.
Everyone wears suits. Brokers who show up with stubble are sent to the bathroom, where a bow-tied attendant dispenses razors, cologne and candy.
- Not letting junior level employees sit down.*
Working from printed lists or index cards, junior brokers dial again and again as they hunt for potential customers. The senior brokers shout and talk about weight lifting, cars and watches. The junior brokers, who are told to make about 500 calls a day, don’t have computers and are required to stand. Their bosses tell them that standing makes them sound more animated, and their pitches more compelling to customers.
Some senior brokers told new recruits not to call women or people whose names sounded as if they were black, Latino or Muslim, because they’re apt to be poor or difficult to sell to, said three former employees, one of whom is black.
- Quoting/screening Boiler Room at the office.
Three former junior brokers said their bosses often said “motion creates emotion” and other lines from the 2000 movie “Boiler Room,” the story of a fictional penny-stock brokerage brought down by the FBI. One of them said John Thomas showed the movie at the office.
In related-ish news, Shia LaBeouf, who learned the ropes at JTF as preparation for Money Never Sleeps, is apparently distancing himself from the firm (his publicist told Bloomberg he was "he was too busy to be interviewed" for the story), which can't be good.
Red Bull-Fed Brokers Stand as John Thomas Draws Scrutiny [Bloomberg]
*"Bursky, the John Thomas lawyer, disputed those accounts. The brokers don’t use high-pressure tactics or scripts and they’re allowed to sit, he said."