SEC Launches Investigation into Thomas Belesis, John Thomas Financial, and Two Hedge Funds

FT. LAUDERDALE, Fla. - June 3, 2013 - PRLog -- The Securities and Exchange Commission announced an investigation by the SEC’s Enforcement Division into Thomas Belesis of John Thomas Financial, and his two hedge funds, “John Thomas Bridge and Oppurtunity  Fund, LP 1,” and “John Thomas Bridge and Oppurtunity Fund LP II”. The Securities and Exchange Commission alleges that George R. Jarkesy, Jr., worked closely with Thomas Belesis to launch two hedge funds that raised $30 million, mostly from John Thomas investors. Jarkesy and his firm, John Thomas Capital Management (since renamed Patriot28 LLC), inflated valuations of the funds’ assets, causing the value of investors’ shares to be overstated and his management and incentive fees to be increased. Jarkesy, a frequent media commentator and radio talk show host, also lied to investors about the identity of the funds’ auditor and prime broker. Meanwhile, although they shared the same “John Thomas” brand name, Jarkesy’s firm and Belesis’ firm, John Thomas Financial, were portrayed as wholly independent. Jarkesy led investors to believe that as manager of the funds, he was solely responsible for all investment decisions. However, Belesis sometimes supplanted Jarkesy as the decision maker and directed some investments from the hedge funds into a company in which his firm was heavily invested. Belesis also bullied Jarkesy into showering excessive fees on John Thomas Financial even in instances where the firm had done virtually nothing to earn them.

According to the SEC’s order instituting administrative proceedings against Jarkesy, Belesis, and their firms, Jarkesy launched the two hedge funds in 2007 and 2009, and they were called John Thomas Bridge and Opportunity Fund LP I, and John Thomas Bridge and Opportunity Fund LP II. The funds invested in three asset classes: bridge loans to start-up companies, equity investments principally in microcap companies, and life settlement policies. Jarkesy mispriced certain holdings to increase the net asset values of the funds, which were the basis for calculating the management and incentive fees that Jarkesy deducted from the funds for himself. Jarkesy also falsely claimed that prominent service providers such as KPMG and Deutsche Bank worked with the funds.

Click on the link to read the full SEC article below:
http://www.sec.gov/news/press/2013/2013-46.htm

For a free consultation with an attorney to discuss filing a FINRA arbitration against John Thomas Financial to potentially recoup your investment losses call (888) 760-6552 or visit http://www.securitieslawyer.com.