The Financial Industry Regulatory Authority, Inc.’s (“FINRA”) Department of Enforcement filed a complaint against John Thomas Financial (“John Thomas”) and its Chief Executive Officer, Anastasios “Tommy” Belesis, alleging fraud in connection with the sale of America West Resources, Inc. (“AWSR”) common stock, intimidation of its registered representatives, trading ahead, failing to provide best execution for customers, and various other violations. Moreover, the FINRA complaint names other John Thomas officers, including Michele Misiti, the Branch Office Manager, John Ward, a John Thomas Trader, Joseph Castellano, Chief Compliance Officer, and Ronald Vincent Cantalupo, the Regional Managing Director.
Regarding the purported fraud involving AWSR common stock, the FINRA Complaint alleges the following: on February 23, 2012, AWSR common stock opened at 28 cents per share and peaked at $1.80 per share. On that day, John Thomas received at least 15 customer sell orders for more than one million shares, however, only entered one of the sell orders on that date. Instead, John Thomas sold the majority of its proprietary positions in AWSR stock, which generated the firm more than $1 million in profit. John Thomas and Tommy Belesis prevented the customer sell orders from being executed on that day, and instead, executed them during subsequent days at far inferior prices. Some customer orders were never entered at all. John Thomas and Belesis misrepresented to clients that their sell orders were not executed because of a problem in the clearing firm’s trading system, restrictions under the Securities Act of 1933 and insufficient volume to fill orders. AWSR is now in bankruptcy, and the John Thomas customers’ investments are virtually worthless. The FINRA Complaint further alleges that John Thomas, Belesis and Misiti tried to conceal the fraud by losing order tickets, and entering falsified order tickets dated February 24, 2012. The Complaint also alleges that Belesis and Misiti made misrepresentations to FINRA regarding Belesis’s involvement in the fraud.
Additionally, the FINRA Complaint alleges that John Thomas, Belesis, Castellano and Cantalupo violated FINRA’s anti-intimidation rule by physically threatening, harassing and assaulting registered representatives who disagreed with the broker-dealer’s business practices.
Lax & Neville LLP effectively assists investors, on both a regional and national level, that may have suffered losses as a result of their broker and broker dealer’s sales practice abuses, including fraud. Indeed, we are currently prosecuting cases against John Thomas, and its owners, including, but not limited to Belesis, for sales practice violations, including churning. Furthermore, Lax & Neville LLP has also nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters, including regulatory enforcement proceedings, and securities-related and commercial litigation. Please contact our team of attorneys for a consultation at (212) 696-1999.