Do Red Bull-Fueled Brokers Reach Boiling Point?
February 25, 2013
LaBeouf told Matt Lauer on NBC’s Today show in 2010 that he trained for the movie with John Thomas traders. Melissa Kates, his publicist, said he was too busy to be interviewed for this story.
Three former junior brokers said their bosses often said “motion creates emotion” and other lines from the 2000 movie “Boiler Room,” the story of a fictional penny-stock brokerage brought down by the FBI. One of them said John Thomas showed the movie at the office.
Some of John Thomas’s pitches were tied to Facebook Inc.’s initial public offering last year. Days before the IPO, the brokerage said in a press release that it had raised $33 million for a fund that invested in privately traded Facebook shares on the secondary market.
John Thomas also said it started another fund called JTF Multi-Opportunity Fund I LLC that invested in Facebook, operator of the world’s biggest social network. The brokerage raised about $7 million for that fund, taking an 8 percent commission, according to a November SEC filing.
Two ex-John Thomas brokers said they misled clients by telling them they had special sources of Facebook stock when they were actually struggling to find enough. Two others said they heard their colleagues making similar claims.
“That is absolutely false,” said Bursky, the lawyer. “We would like those people to step forward and identify themselves to Finra and the general public.”
John Thomas’s then-head of investment banking, Avi Mirman, was a manager of the JTF Facebook fund, according to the November filing. He was among at least nine John Thomas employees who left the firm this month to join Corinthian Partners LLC, another New York-based brokerage, Finra records show. They moved after Belesis’ brother George bought a stake in that company, Bursky said.
“Any statements by Mr. Mirman would have been consistent with the offering documents” for the Facebook fund, said Seth Taube, Mirman’s lawyer at Baker Botts LLP in New York. “There was no guarantee stock could be obtained and there was no guarantee of the price.”