Securities Broker-dealer firm John Thomas Financial Inc. (JTF) and its chief executive Anastasios “Tommy” Belesis recently reached a settlement agreement with the Securities and Exchange Commission in an enforcement action relating to their roles in the management of two fraudulent hedge funds. These hedge funds — John Thomas Bridge and Opportunity Fund LP, and John Thomas Bridge and Opportunity Fund II, LP – were managed by an affiliate of JTF.
The SEC has also determined that the hedge funds’ manager breached fiduciary duties owed to the hedge funds when he caused the hedge funds to pay millions of dollars in fraudulent management fees; that JTF aided and abetted the managers’ breaches of fiduciary duties; and that JTF itself received improper finder fees when the hedge fund made various investments.
The SEC’s cease and desist order suggests that Belesis caused these hedge funds — which he pushed on his broker-dealer firm’s customers — to be looted. It appears that these funds were ultimately run for Belesis’ benefit at the expense of his firm’s broker customers.
According to the SEC’s cease and desist order: “the Manager abandoned his fiduciary duties to the Funds and negotiated arrangements whereby the borrowing companies – in which the [hedge funds] were invested and from which the [hedge funds] sought repayment – would pay unwarranted finder fees to Respondent JTF out of the proceeds received from the [hedge funds]. Thus, the Manager of the Funds, when negotiating bridge loans between the [hedge funds] and the borrowing companies, placed the interests of Respondents above the interests of the [hedge funds]….”
The settlement requires Respondent JTF to pay a civil fine to the SEC of $500,000.
Investors who were sold investments in these hedge funds by JTF may have claims against JTF for unsuitable investment recommendations and fraud. It is possible that investors in these funds may recoup losses by pursuing claims in arbitration against JTF at FINRA Dispute Resolution.
Blau & Malmfeldt invites JTF customers who invested in the John Thomas Bridge Opportunity Fund LP and/or the John Thomas Bridge and Opportunity Fund II, LP to contact us at 312-443-1600 for a complimentary case evaluation. Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.