John Thomas Financial Inc. Chief Executive Officer Anastasios “Tommy” Belesis was cited by industry regulators for defrauding customers and threatening his brokers.
John Thomas Financial, which also faces disciplinary action from the Securities and Exchange Commission, dumped shares in America West Resources Inc. (AWSRQ) as the stock surged in 2012 while thwarting clients’ efforts to sell, the Financial Industry Regulatory Authority said today in a complaint.
While the brokerage “sold its shares at the height of the price spike, the firm received at least 15 customer orders to sell more than 1 million shares, yet only entered one of these orders for execution,” Finra said in a press release today.
Bloomberg News reported Feb. 25 that Belesis, who founded John Thomas in 2007, raised millions of dollars for clients 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 built a public persona with appearances on television, endorsements from celebrities and a role in the movie “Wall Street: Money Never Sleeps.”
Belesis and other top executives also harassed and intimidated employees, according to Finra, which is seeking sanctions including restitution of “ill-gotten gains.”
David Pitts, a John Thomas spokesman at public relations firm Argot Partners LLC, and Robert Bursky, a lawyer for John Thomas, didn’t respond to messages seeking comment. Last month, Pitts said that Belesis would “defend himself vigorously” against the SEC’s claims.
John Thomas frequently recommended investing in America West, a Salt Lake City-based coal company, former employees and customers said in the February report. Between 2008 and 2011, John Thomas raised at least $20 million for America West, according to Finra. The brokerage also built a proprietary position in the stock, the regulator said.
On Feb. 23, 2012, AwesomePennyStocks.com, a website that says it gives subscribers tips on low-priced stocks, sent an e- mail that seemed to recommend America West, Finra said. The stock rose as high as $1.80 from about 28 cents.
That afternoon, Belesis told an employee to sell John Thomas’s stock in America West, for proceeds of about $1.1 million, Finra said. At the same time, Belesis prevented the execution of customer orders to sell their shares, Finra said in its statement.
“To conceal that the firm received the orders during the Feb. 23 price spike but failed to execute them on that day, certain of the respondents conveniently ‘lost’ at least 14 order tickets,” Finra said in the complaint. America West filed for bankruptcy a year later.
Ronald Cantalupo, a managing director at John Thomas, was also named in the complaint. In one case this year, Cantalupo confronted a banker, listed in the complaint as AC, who was planning to leave with his staff, Finra said. AC said he didn’t want to meet with Cantalupo because he’d previously been incarcerated for drug-related crimes, according to the complaint.
“Cantalupo told AC that, even if it meant he went back to prison, he would ‘get’ AC,” the regulator said.
According to Finra, Belesis berated another broker who was planning to leave, saying “f--- you, you’re done in this business, you’re done in this business, get the f--- out of here.” Cantalupo then shoved him, the regulator said.
Cantalupo had no immediate comment, when contacted by phone.
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