Anastasios “Tommy” Belesis, owner of John Thomas Financial, a brokerage firm, and George R. Jarkesy Jr., a hedge fund manager, worked together to defraud investors in the John Thomas Bridge and Opportunity Fund LP I and John Thomas Bridge and Opportunity Fund LP II, according to a recently filed SEC complaint. The funds reportedly invested in bridge loans to start-up companies and life settlement policies. They were said to be independent from John Thomas Financial, and raised $30 million from investors.
According to the SEC, Mr. Jarkesy misled investors into believing that he was solely responsible for investment decisions. In fact, Mr. Belesis had actually intimidated Mr. Jarkesy into letting him make investment decisions for the funds. Mr. Belesis allegedly directed some investments from the hedge funds into a company owned in part by John Thomas Financial (“SEC charges Belesis, hedge fund manager with fraud,” by Mark Schoeff Jr., InvestmentNews). Learn more about What Every Investor Should Know About Hedge Funds.
Mr. Belesis also allegedly intimidated Jarkesy into inflating the valuation of the funds, which increased fees paid by investors. These fees were then allegedly paid to John Thomas Financial and Mr. Belesis, even though they had done virtually nothing to earn the fees. Thus Mr. Jarkesy breached his fiduciary duty to the investors, according to the SEC.
The scheme to enrich Mr. Belesis and his firm allegedly cost the two hedge funds significant sums of money and harmed the investors.
Intimidation tactics are apparently nothing new to Mr. Belesis; earlier in March, FINRA accused him of using such tactics on brokers who left his firm.
In a separate matter, earlier this year, the Financial Industry Regulatory Authority (FINRA), which oversees broker-dealers, notified Mr. Belesis that it might commence disciplinary proceedings against him for his role in an alleged pump-and-dump stock scheme.
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