Do Red Bull-Fueled Brokers Reach Boiling Point?
February 25, 2013
“I didn’t know John Thomas from John Adams,” Remington, 47, said in a phone interview. “He said John Thomas was this great firm right there on Wall Street, right in the pulse of everything going on.”
Remington said the salesman, Omar “Mark” Hassan, told him to invest his entire portfolio in America West. Hassan said it was a “can’t miss” opportunity and that the company had lots of contracts lined up, Remington said.
“It starts off calm and the intensity of the call builds,” Remington said. “Next thing you know you’ve got three guys talking at you on the phone at the same time.”
Remington ended up losing about $150,000, according to Sara Hanley, a lawyer in Asheville, North Carolina, who represents him in a pending arbitration claim against Hassan and John Thomas. The broker and the firm deny all the allegations in the case, Bursky said.
America West paid John Thomas more than $1 million in commissions in 2011 and gave the firm warrants to buy 200,000 shares at $1 a share, the coal company said in an SEC filing in November of that year. The brokerage discloses banking fees and ownership stakes when marketing stock, Bursky said.
Another John Thomas customer, Fermo Jaeckle, 62, the founder of a Wisconsin cheese company said he generally has made money since Tommy Belesis solicited him over the phone years ago. America West “seemed like a good idea at the time,” Jaeckle said in a phone interview arranged by the brokerage’s spokesman.
Finra warned Belesis last month it made a preliminary decision to discipline him after his firm “recklessly” sold part of its own stake in a company while failing to execute clients’ orders to sell the same stock. The watchdog said it also may accuse him of using deception to inflate the price of the shares.
Bursky declined to discuss Finra’s allegations, which are described in Belesis’ regulatory records. One former employee said Finra investigators questioned him about John Thomas’s trading in America West on Feb. 23, 2012.
That day, America West spiked from 29 cents to as high as $1.80. John Thomas brokers told customers they couldn’t immediately sell their stock because they hadn’t filled out the proper paperwork, according to two former employees. The stock fell to 65 cents the next day.
When asked about the incident, Kaufman said he wasn’t in the office that day, and when he returned, he heard there had been “some issues.”
“I think this is a case of a small business that was growing at hyper-speed that couldn’t handle the growth,” Kaufman said. “The guy in charge would be the first to admit it, but that does not make him a crook.”
The former employees said they worked until 8 or 9 p.m., with shorter hours on Saturdays, when brokers watched sports or movies instead of CNBC while making calls. Belesis loved the movie “300,” they said, as well as the “Wall Street” sequel in which he portrayed a banker alongside actor Shia LaBeouf.