SEC Bars Tommy Belesis, Former Chief of John Thomas Financial and Orders Disgorgement and Restitution

The Securities Exchange Commission (SEC) has barred from the brokerage business former John Thomas Financial chief Tommy Belesis for his role in steering customers into hedge funds and influencing the fund manager and advisor to breach their fiduciary duties.

In addition to the one-year ban, the SEC ordered Belesis to pay disgorgement, interest and a civil penalty totaling over $500,000. The misconduct at issue in the SEC cease-and-desist letter related to two John Thomas Financial hedge funds for which the firm solicited approximately $30 million in investor money with the promise that the fund manager would act independently in making investment decisions. This impression turned out to be false, according to the SEC.

This SEC punishment is not the only regulatory trouble for Belesis. He is also the subject of a complaint by FINRA’s enforcement department. According to a report by Investment News, FINRA’s complaint alleges that:

“Mr. Belesis bullied brokers and lied to senior staff as part of a fraudulent plan to profit from a penny stock. JTF was known for its culture of intimidation, in which brokers were expected to spend hours cold-calling potential customers.”

In response to the FINRA complaint, John Thomas Financial closed up shop, ending its registration as a broker-dealer.

Not just a relic of the high-flying 1980s, these kind of boiler-room tactics are alive and well, and investors should be wary of any firm that “cold calls” them pitching investments.

If you believe you have been harmed by the misconduct of your financial advisor or brokerage firm, you should contact The Galbraith Law Firm at 212.203.1249 or kevin@galbraithlawfirm.com for a free, confidential consultation.