Do Red Bull-Fueled Brokers Reach Boiling Point?
February 25, 2013
Belesis, bald and muscular, sometimes seeks to inspire his predominantly male staff with speeches about how they’re entering a “war zone” before the calling starts in earnest. He walks the floor, patting people on the back and calling them “buddy.” Some days, executives from small publicly traded firms pitch their stocks to the brokers.
Working from printed lists or index cards, junior brokers dial again and again as they hunt for potential customers. The senior brokers shout and talk about weight lifting, cars and watches. The junior brokers, who are told to make about 500 calls a day, don’t have computers and are required to stand. Their bosses tell them that standing makes them sound more animated, and their pitches more compelling to customers.
“Some of them will talk to you, some of them will get upset that you’re calling them,” said Adam Bednarz, who worked for John Thomas in 2011 and is now a student at Pace University in New York. He said he respects Belesis. “To me a stock broker, all it really is is a glorified salesman,” Bednarz said.
Some senior brokers told new recruits not to call women or people whose names sounded as if they were black, Latino or Muslim, because they’re apt to be poor or difficult to sell to, said three former employees, one of whom is black. The brokers were accustomed to rejection, said Gwiazda, who now writes a financial blog called Gweezy Capital.
“It was all, ‘Ahh, you f---ing muttley, you f---ing hang up on me again,’ ” said Gwiazda, parroting his former colleagues’ complaints. “This was like an echo in my head.” Muttley refers to the canine sidekick of accident-prone villain Dick Dastardly in Hanna-Barbera cartoons.
Bursky, the John Thomas lawyer, disputed those accounts. The brokers don’t use high-pressure tactics or scripts and they’re allowed to sit, he said. About 30 percent are minorities, showing the firm doesn’t discriminate, said Pitts, the company spokesman. Wayne Kaufman, 59, the brokerage’s chief market strategist, said there’s nothing wrong with cold-calling.
“Every sales organization has sales people of different caliber,” Kaufman said in a phone interview. “I’m sure that there are brokers at every firm that’s ever existed, including Goldman Sachs, that are fast talkers or seem like used-car salesmen.”
Some other boiler rooms have crossed the line into fraud. Meyer Blinder, the Blinder Robinson & Co. founder known for his gold chains and diamond pinkie rings, pioneered techniques in the 1980s for cold-calling customers and enticing them with promises of stock tips later, according to a 2004 obituary in the New York Times. He served more than three years in prison for securities fraud.
“They believe it’s their money and it’s just out there for them to take it,” Phil Feigin, the former Colorado securities commissioner, said of Blinder and others he investigated. “The thrill was in the kill. It’s blood-curdling. They have no conscience.”