Life Imitates Art Imitates Boiler Rooms
Why did regulators need to wreck John Thomas Financial Inc.? Because it's wreckable, as Gordon Gekko said in the movie "Wall Street."
The Financial Industry Regulatory Authority filed a complaint today accusing John Thomas and its chief executive, Anastasios "Tommy" Belesis, of fraud. The Securities and Exchange Commission previously had sued Belesis and his New York-based firm; they have denied all wrongdoing.
As Bloomberg News reporter Zeke Faux wrote in a memorable Feb. 25 profile, Belesis, 38, "has raised millions of dollars for companies with about 200 brokers in a boiler room, where trainees stand as long as 14 hours a day barking memorized sales pitches for as little as $300 a week." Former junior brokers said their bosses often quoted lines from the 2000 movie "Boiler Room," starring Vin Diesel and Giovanni Ribisi, about a penny-stock brokerage that gets taken down by the feds. One former broker said John Thomas showed the film at the office.
One of the great scenes from "Boiler Room" is of a group of young brokers sitting around drinking one night, watching "Wall Street," Oliver Stone's 1987 classic. They know the flick so well -- they recite the lines to each other, each guy trying to outdo everyone else.
You know where this is heading. One day some movie director is bound to shoot a scene of penny-stock salesmen watching the scene from "Boiler Room" where the young thugs are watching the scene from "Wall Street." Inevitably the new movie will become a hit at other real-life boiler rooms, and Hollywood can repeat the process. Then that movie will catch on, and so on.
The John Thomas saga mixes life and art already. Belesis had a small role in Stone's 2010 sequel, "Wall Street: Money Never Sleeps." The bald, muscular executive played a trader.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)