Belesis under Finra microscope

Regulator alleges that John Thomas CEO orchestrated pump and dump

Feb 17, 2013 @ 12:01 am

By Bruce Kelly

Finra is investigating Anastasios “Tommy” Belesis, owner and chief executive of John Thomas Financial, for his role in an alleged pump-and-dump stock scheme.

Last month, the Financial Industry Regulatory Authority Inc. sent Mr. Belesis a Wells notice, according to his profile on BrokerCheck. A Wells notice from Finra signifies that the self-regulator may commence disciplinary proceedings.

Finra alleges that Mr. Belesis, a regular guest on the Fox Business Network, employed manipulative and potentially fraudulent means to buy and sell stock, the earmarks of a pump-and-dump scheme.

Mr. Belesis “willfully or recklessly sold a substantial portion of a firm proprietary position while failing to execute customer orders to sell shares of the same stock at prices that would have satisfied the unexecuted orders,” according to Broker-Check.

He also allegedly “failed to follow instructions by the customers to sell the shares.”

In addition, Finra claims that Mr. Belesis artificially inflated the price of stock.

“Finra staff has advised that it intends to recommend that a proceeding be brought making allegations along the lines set forth in the notification,” John Thomas Financial spokes-man David Pitts said.

“It is the policy of John Thomas Financial not to comment on pending regulatory matters. If a proceeding is brought, JTF intends to vigorously contest and defend the matter.”

This month, the New York Post reported that Mr. Belesis is under investigation by the FBI, Finra and the Securities and Exchange -Commission.

InvestmentNews also reported that several ex-brokers of John Thomas Financial had filed court affidavits stating that Mr. Belesis ran a pump-and-dump stock scheme.

The alleged scheme involved Liberty Silver Corp., a penny stock that the SEC ordered to stop trading for two weeks in October.

Those court filings were part of a response to a lawsuit filed against the brokers by John Thomas Financial.

Meanwhile, the firm's management thinks that “there is not a stitch of evidence that any sort of Justice Department inquiry is ongoing. No one at JTF has been contacted,” Mr. Pitts said.

“We doubt the Justice Department is in the habit of leaking inquiries, and if an inquiry was going to be leaked, that it would be to the New York Post. Notably, the Post does not state that its source is anyone in the Justice Department,” Mr. Pitts said.

“JTF has reason to believe that a disgruntled former employee, who was terminated for cause at JTF's request for improper conduct, is at the root of this rumor,” he said. “JTF is taking appropriate legal action against him.”

Finra also alleges that Mr. Belesis made “material misrepresentations to customers, registered reps and Finra about the reasons why the customer orders had not been executed.”

The industry regulator also accused the firm of falsifying or failing to keep pertinent records of the stock orders in question.


Meanwhile, some members of the firm's investment banking team have left to work under the aegis of another small New York brokerage firm, Corinthian Partners LLC.

Avi Mirman, the former managing director of investment banking at the now-defunct GunnAllen Financial Inc., joined Corinthian on Feb. 8.

John Thomas has strong connections to Corinthian. Mr. Belesis' brother, George, is president of John Thomas Financial but also a minority owner of Corinthian through an outside holding company.

Tommy Belesis has no stake in Corinthian.

Corinthian occupies space in John Thomas' Wall Street offices.

“I think they're trying to slither away to Corinthian,” said Richard Roth, an attorney who represented the former John Thomas Financial brokers in the suit.

Mr. Roth said that the suit was dropped, but Mr. Pitts said that wasn't the case.

John Thomas' problems likely will drag on, Mr. Roth said.

“I don't think the Wells notice is the end of the investigation,” he said. Twitter: @bdnewsguy


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Mar 13



InvestmentNews is honoring female financial advisers and industry executives who are distinguished leaders at their firms. These women have advanced the business of providing advice through their passion, creativity, inclusive approach and... Learn more

Featured video


The power of data

Your clients have financial news and data at their fingertips, but donít know how to interpret it. Katy Gibson of Envestnet|Yodlee and Blake Kannady of Envestnet discuss the power of leveraging aggregated data.

Recommended Video

Path to growth

Latest news & opinion

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.

Legislation would make it harder for investors to sue mutual funds over high fees

A plaintiff would have to state in their initial complaint why fiduciary duty was breached, and then prove the violation with 'clear and convincing evidence.'

Relying on trainees, Merrill Lynch boosts adviser headcount in 2017

Questions remain about long-term effectiveness of wirehouse's move away from recruiting experienced brokers.

Supreme Court review of SEC judges could roil pending cases

But long-term, the agency may get around questions of constitutionality by changing the way it brings on administrative law judges.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print