John Thomas Financial faces questions from the Financial Industry Regulatory Authority Inc. about accusations that it attempted to intimidate brokers who had left the firm, according to the attorney representing a group of the brokers.
Finra sent a Wells notice in January to Anastasios “Tommy” Belesis, the firm's owner and head, indicating that the regulator may commence disciplinary actions against him.
Asked whether Finra was investigating John Thomas for harassing brokers, an attorney for the independent broker-dealer, Robert Bursky, said that he couldn't comment “on any pending regulatory investigation that is nonpublic.”
John Thomas “has been around five years, hundreds of brokers have been employed and there's never been a claim filed regarding harassment,” he said.
Finra spokeswoman Nancy Condon declined to comment.
Richard Roth, the attorney representing the group of five brokers who left John Thomas in December, said that he became concerned when he saw a letter sent by the firm last Thursday to the brokers.
In the letter, a John Thomas compliance officer said that the firm had initiated a review of a broker's Form U-5, or the notice of the broker's termination.
In the letter, the firm, which sued the brokers in January and later dropped the charges, said that it had scheduled interviews with the representatives at its headquarters in New York this month and that the interviews would be transcribed by a court reporter.
Should a broker not appear or decline to answer questions, it could spell trouble for the broker's U-5.
John Thomas “may conclude that you are declining to provide reasonable cooperation in the internal review, which, in and of itself, may be a conclusion the firm reports” to the group that maintains brokers' employment records, the Central Registration Depository.
“This letter is outrageous. I know Finra is conducting an investigation into how [John Thomas] treats its brokers that have departed and into the firm's intimidation tactics of its brokers,” Mr. Roth said.
“This letter insists that the broker come back and either be drilled by John Thomas and its attorneys or, if they do not, threatens to again ding their U-5,” he said.
Mr. Bursky acknowledged that when the brokers left in December, John Thomas contacted the New York Police Department.
The brokers “walked out with their books and they wound up returning them, most likely after copying them,” he said.
Mr. Bursky added: “To my knowledge, there has been no outcome” of that complaint.
The firm's internal review was standard industry procedure, he said.
The group of brokers in question, led by Renos Gordos, filed their own affidavit last month alleging that Mr. Belesis ran a pump-and-dump stock scheme.
“This is the brokers' time to put everything on the record,” said Mr. Bursky, noting that the firm has chosen to drop its lawsuit against the brokers but is pursuing the claim in Finra arbitration. “I challenge them to show up.”
This latest dust-up is another headache for John Thomas and Mr. Belesis, who already faces a potential Finra disciplinary action over accusations that he artificially inflated the price of a stock.
John Thomas has about 200 reps.