Belesis-Linked Hedge Fund Manager Seeks End To SEC Proceeding

Jan 30 2014 | 2:35pm ET

An accused hedge fund fraudster wants the Securities and Exchange Commission off of his case.

George Jarkesy, a conservative talk-radio host accused of defrauding investors in his hedge fund with the help of famed boiler-room operator Anastasios Belesis, has asked a federal judge to put a stop to the agency's proceedings against him. According to Jarkesy, the SEC has already made up its mind and allowing it to hold the administrative hearing, scheduled for Monday, would violate his constitutional rights.

In his court filing, Jarkesy took issue with the SEC's statement following its decision to sue in March. As is the regulators standard practice, it laid out its case against Jarkesy, alleging that he lied to investors about his independence from Belesis and inflated the funds' value.

In doing so "in advance of the adjudication and without permitting plaintiffs to present any evidence or defenses, the SEC has removed all doubt about its ability to serve as a fair tribunal," Jarkesy said in a complaint filed yesterday in Washington federal court.

In addition, the SEC's allegations have irreparably harmed both Jarkesy and his investment firm, Patriot28, which was known as John Thomas Capital Management prior to the charges. Belesis' firm is called John Thomas Financial.

Belesis in December agreed to settle the allegations, accepting a one-year ban from the securities industry and a $1 million fine. The SEC could seek up to $100 million in fines against Jarkesy, as well as a lifetime ban.

According to the SEC, Belesis bullied Jarkesy into paying more in fees and pushed him to invest in companies that JTF has interests in. All told, Belesis' firm received nearly $5 million from Jarkesy's funds, much of it for "nearly inconsequential work."


In Depth

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.