Financial Industry Regulatory Authority, Inc. Files Complaint Against John Thomas Financial, Inc. and its Chief Executive Officer, Anastasios Belesis, Charging Fraud in Connection with the Sale of America West Resources, Inc.'s Common Stock
Apr 16 13
Financial Industry Regulatory Authority, Inc. announced that it has filed a complaint against John Thomas Financial, Inc. and its Chief Executive Officer, Anastasios "Tommy" Belesis, charging fraud in connection with the sale of America West Resources, Inc. common stock, intimidation of registered representatives, trading ahead, failing to provide best execution for customer orders and various other violations. The complaint also names Michele Misiti, Branch Office Manager; John Ward, trader; Joseph Castellano, Chief Compliance Officer; and Ronald Vincent Cantalupo, Regional Managing Director. John Thomas Financial and many of its customers owned America West Resources stock as a result of participation in the company's private financings. According to the complaint, on Feb. 23, 2012, the price of America West Resources' common stock, which at the time was thinly traded on the OTC Bulletin Board, spiked higher, by over approximately 600%, opening at 28 cents per share, peaking at $1.80 per share and eventually closing the day at $1.29 per share. On the same day, John Thomas Financial sold 855,000 shares, the majority of its proprietary position in America West Resources, reaping proceeds of more than $1 million. The complaint alleges that while John Thomas Financial sold its shares at the height of the price spike, the firm received at least 15 customer orders to sell more than one million shares, yet only entered one of these orders for execution on Feb. 23, 2012. Instead, John Thomas Financial and Belesis prevented the orders from being executed on the same day they were received and some customer orders were executed the following day or days after at prices grossly inferior to those obtained by the firm while other customer orders were not entered or executed at all. AWSR is now in bankruptcy and the customers' investments are virtually worthless. In addition, the complaint alleges that JTF and Belesis, through Misiti and Castellano, lied to the firm's registered representatives and customers about the reasons the customer shares could not be sold on Feb. 23, 2012, including that there was a problem with the clearing firm's trading systems, there was insufficient volume on that day to fill the orders, and the shares could not be sold because they were restricted under the Securities Act of 1933. FINRA further alleges that to conceal that the firm received the orders during the February 23 price spike but failed to execute them, JTF and Belesis, through Misiti, "lost" order tickets for customer orders received on Feb. 23, 2012, and replaced six of those tickets with falsified tickets dated Feb. 24, 2012. Belesis and Misiti also made misrepresentations to FINRA concerning Belesis' role in the misconduct. Also, the complaint charges John Thomas Financial, Belesis, Castellano and Cantalupo with violating FINRA's anti-intimidation rule by physically threatening, harassing and assaulting registered representatives who have disagreed with Belesis' business practices, and threatening to ruin the registered representatives' financial careers by improperly marking their industry records. Under FINRA rules, a firm or individual named in a complaint can file a response and request a hearing before a FINRA disciplinary panel. Possible sanctions include a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations and payment of restitution. The issuance of a disciplinary complaint represents the initiation of a formal proceeding by FINRA in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.
U.S. Precious Metals, Inc. Changes its Investment Banking Agreement from John Thomas Financial, Inc. to Source Capital Group, Inc
Mar 20 13
On November 29, 2012, U.S. Precious Metals, Inc. disclosed that it entered into an Exclusive Investment Banking Agreement with a prominent, New York investment banking firm. Under the Banking Agreement, the Firm agreed to provide a range of investment advisory services to the Company, including the introduction to potential lenders, investors and acquiring entities. In addition, on February 13, 2013, the company disclosed that it signed a Term Sheet with the Firm to provide a bridge loan financing for the company with an anticipated closing date of February 22, 2013. The name of the Firm is John Thomas Financial, Inc. On March 14, 2013, the company and John Thomas completed a Termination Agreement and Mutual Release with an effective date of March 12, 2013 pursuant to which the parties terminated the Banking Agreement and granted mutual releases with respect to the Banking Agreement. In addition, John Thomas has agreed to return to the company $20,000 as a good faith, partial refund of the $50,000 retainer previously paid by the company. As of the date of this filing, the company also discloses that it had not closed the Bridge Loan transaction with the Firm. On March 12, 2013, the company entered into an engagement agreement with Source Capital Group, Inc. Pursuant to the agreement, Source Capital will act as the company’s exclusive placement agent and investment banker during the term of the agreement. The company agreed to pay Source Capital a fee of 3% of any proceeds received by the company in connection with any financing. In addition, the company agreed to issue to Source Capital 250,000 shares of its common stock.