FINRA Expels John Thomas Financial & Bars Tommy Belesis
On January 9, 2015, The Financial Industry Regulatory Authority (“FINRA”) announced that a hearing panel expelled John Thomas Financial, and barred its Chief Executive Officer, Anastasios “Tommy” or “Thomas”) Belesis, from the securities industry for violations in connection with the sale of penny stock issuer, America West Resources, Inc. (“AWSR”) common stock, including trading ahead of customers’ orders, recordkeeping violations, violating just and equitable principles of trade, and for providing false testimony. The FINRA hearing panel also ordered John Thomas Financial and Belesis to pay $1,047,288, plus interest. Additionally, John Thomas Financial and Belesis were suspended for two years and jointly and severally fined $100,000, and John Thomas Financial’s Chief Compliance Officer Joseph Castellano was suspended for one year and fined $50,000, for harassing and intimidating registered representatives.
Thomas Belesis founded John Thomas Financial in 2007. The firm provided a full range of retail brokerage, investment banking, corporate advisory and private wealth management services. Belesis played a trader in the movie Wall Street II: Money Never Sleeps.
On Feb. 23, 2012, the price of AWSR common stock spiked approximately 600 percent, opening at 28 cents per share, peaking at $1.80 per share and eventually closing the day at $1.29 per share. That same day, John Thomas Financial sold 855,000 shares, the majority of its proprietary position in AWSR, reaping proceeds of more than $1 million. FINRA found that John Thomas Financial and Belesis traded ahead of 14 of their own customers who tried to sell their positions. FINRA’s rule requires the firm to execute those orders at the same or better price than the firm obtained for itself. In failing to do so, John Thomas Financial and Belesis violated FINRA’s just and equitable principles of trade rule.
FINRA also found that John Thomas Financial and Belesis failed to keep and maintain records of at least 14 customer orders to sell AWSR received on Feb. 23, 2012.
The panel also concluded that John Thomas Financial, Belesis and Castellano intimidated and harassed representatives who resigned by filing false Forms U5 indicating that the firm had a reasonable basis for investigating these individuals for serious misconduct, when this was not the case. A Form U5 is filed by a securities firm with FINRA when an individual is terminated. Information from the Form U5 is publicly disclosed through BrokerCheck, so providing false information undermines the integrity of the system. Moreover, the panel found that Belesis’ threat to withhold a former representative’s commission check unless he signed an amended employment contract and affidavit was coercive. In addition, the decision noted that Belesis provided false testimony to FINRA.
Unless the hearing panel’s decision is appealed to FINRA’s National Adjudicatory Council (NAC), or is called for review by the NAC, the hearing panel’s decision becomes final after 45 days.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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