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John Thomas Financial Inc. is a brokerage house straight out of the movie Boiler
Room, with brokers fueled by vending machines stocked with nothing but energy
drinks and music from Rocky films blaring from speakers. Its founder, Anastasios
Tommy Belesis, even had a role in the sequel to Wall Street.
Junior brokers cold-call prospects for up to 14 hours a day, working from a
memorized script that they rehearse by screaming pitches across the room to
each other before the opening bell, a former employee of the firm told BuzzFeed.
BuzzFeed obtained both that script, used by brokers of every level at the 200employee firm, as well as another script known internally as the Golden
Pitchbook, which is given only to a privileged few senior brokers at the firm.
Considered a performance reward for top brokers, the Golden Pitchbook is
handed down from their mentors at the firm who have also received the elusive
tome, the source said.
Its secret, privileged information, said the source. Some people at the firm dont
even know about it.
The books origins date to the 1980s at Bear Stearns, and it has gone through
various iterations on its journey into the hands of the lucky JTF broker who, after
impressing superiors, is walked down the street to a Kinkos, where senior brokers
supervise the books copying and hand-off.
Its a reward for senior brokers to give to junior brokers on their team as an
investment in them, the source said. Once they had it, they used it all the time.
The book offers a rare behind-the-scenes look into the world of high-pressure,
hard-scrabble Wall Street stock jockeying, featuring detailed scenarios and
responses used to pitch stocks to prospective clients.
The aggressive pitch tactics in the book and supporting JTF documents, such as
what one scenario described by the source as Dont Pitch The Bitch, have
caught the attention of the FBI, the Securities and Exchange Commission, and
the Financial Industry Regulatory Authority.
In March, the SEC charged Belisis with fraud for a hedge fund scheme in which
he steered bloated fees to JTF. A month later, Finra filed a formal complaint
against JTF regarding the firms actions in Februrary 2012, when it allegedly
pushed shares of America West Resources, Inc. (AWSR) common stock on
investors, thus inflating the price. Brokers at the firm also allegedly failed to
execute sale orders for clients in a timely manner but sold the majority of its
proprietary shares for a more than $1 million profit.
The firms alleged failure to execute at least 14 client sell orders lost investors
thousands, and America West is now in bankruptcy. In an even more outrageous
twist, the Finra complaint accuses Belesis of intimidating employees with threats
of maligning their broker records and, in one case, running over an employee with
his car.
Against that backdrop, here are some of the techniques outlined in the Golden
Pitchbook used by JTF brokers. The firms attorney, Robert Bursky, in February
told Bloomberg it did not use high-pressure tactics. He said at the time it doesnt
use scripts. Bursky did not respond to BuzzFeeds requests for comment.