Tommy Belesis' B-D on the ropes: Clearing firm

John Thomas Financial said to be in violation of net capital rules; 'required to suspend all business operations'

Jun 26, 2013 @ 3:36 pm

By Bruce Kelly

It looks like it's finally the end for Anastasios “Tommy” Belesis' broker-dealer, John Thomas Financial. The brokerage's clearing firm last week told the B-D's clients the firm was stopping business because of a lack of capital.

John Thomas Financial “has failed to maintain the minimum amount of net capital required by applicable rules and regulation,” according to a letter sent by Sterne Agee & Leach Inc., the clearing firm, to John Thomas clients. “Accordingly, [John Thomas Financial] is required to suspend all business operations while it is out of net-capital compliance.”

A net-capital violation is typically the death knell for a small or midsize independent broker-dealer such as John Thomas, which at one time had about 200 independent registered representatives and occupied offices around the corner from the New York Stock Exchange.

A message left at John Thomas' office Wednesday morning was not returned.

The Securities and Exchange Commission's net-capital rule regulates a broker-dealer's ability to meet its financial obligations to its customers and creditors.

John Thomas has recently been beset by woes. Its colorful owner, who had a bit part in Oliver Stone's “Wall Street” movie sequel, has been under the scrutiny of the SEC and the Financial Industry Regulatory Authority Inc. over the past few months. According to a Finra complaint filed in April, Mr. Belesis bullied brokers and lied to senior staff members as part of a plan to pocket more than $1 million in profit off penny stock trades. Finra also claims trades in one penny stock benefited John Thomas while hurting its clients.

The SEC in March charged that Mr. Belesis and a Houston-based hedge fund manager worked in cahoots to defraud investors.

A report this month in The New York Post said Mr. Belesis' brokerage was in danger of losing its fancy digs at 14 Wall St., where John Thomas occupies the entire 23rd floor.

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