Boiler Room Operator Who Doesn't Let Junior Sit Down, Thinks Cameos In Shia LaBeouf Movies Are Good For Business Shockingly Charged With Fraud

Who could have seen this coming, besides everyone?
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Who could have seen this coming, besides everyone?

Anastasios “Tommy” Belesis, founder of John Thomas Financial Inc., and Houston radio host George Jarkesy defrauded investors in two hedge funds, the U.S. Securities and Exchange Commission said. The two men, both 38, told investors the funds were independent from the brokerage then steered excessive fees to Belesis’s New York-based firm, the SEC said today in a statement. The regulator said it started administrative proceedings against Belesis, Jarkesy, who managed the funds, and their firms. They could face punishments including disgorgement and financial penalties, the SEC said. Belesis worked with Jarkesy to raise two funds in 2007 and 2009, which peaked at $30 million under management, telling investors they would invest in microcap stocks, bridge loans and life-insurance policies, the SEC said. Jarkesy inflated the value of investments in disclosures and hired stock promoters to boost the price of shares, while Belesis and John Thomas Financial “willfully aided, abetted and caused” the hedge funds’ violations, according to the regulator.

Bloomberg News reported on Feb. 25 that Belesis, who founded John Thomas in 2007, has raised millions of dollars for companies with about 200 brokers in a boiler room across the street from the New York Stock Exchange, where trainees stand as long as 14 hours a day barking memorized sales pitches for as little as $300 a week. The bald, muscular executive has built a public persona with appearances on business television, endorsements from celebrities and a role in the movie “Wall Street: Money Never Sleeps.” The SEC said in today’s complaint that Belesis repeatedly pushed Jarkesy for more fees, in a “profane and belligerent manner,” and tried to make the funds invest in companies his firm had interests in. On one occasion cited by the SEC, after Belesis yelled at the fund manager, Jarkesy tried to reassure him by saying in an e-mail: “We will always try to get you as much as possible, Everytime without exception!”

John Thomas’s Belesis Aided Hedge-Fund Fraud, SEC Says [Bloomberg]
SEC Charges Hedge Fund Manager and Brokerage CEO with Fraud [SEC]
Related: “Brokers who show up with stubble are sent to the bathroom, where a bow-tied attendant dispenses razors, cologne and candy.”

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"Brokers who show up with stubble are sent to the bathroom, where a bow-tied attendant dispenses razors, cologne and candy."

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 Post reported 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: