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

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.